Stand back! I'm not sure how big this thing is going to get!

The teaser of Rex Crum’s piece titled Apple bulls start looking beyond the iPod caused the Macalope’s furry ears to stand up today.

Steve Jobs will need more than a phone to sustain growth

What?! Can it be that the iPhone – which, if you’ve been paying attention, you’ll note has not been announced yet – is not even enough to save our beleagered Apple?!

No, this is simply a case of teasers gone wild because, while there is some other silliness, this particular assertion is not in the piece. Teasers are often not written by the reporter but by a copy editor who may or may not have read the whole piece and may or may not have understood it. Even the lede belies the implication of the teaser.

Money managers who own shares of Apple Computer Inc. — and the Wall Street analysts who follow the company — believe firmly that Chief Executive Steve Jobs has more iPod magic up his sleeve.

And what the piece says, which is true, is that Apple will need more than the iPod to sustain growth.

Yet even those who are bullish on prospects for the technology giant say Apple’s reliance on its handheld music player to power sales and profit growth cannot sustain it forever.

Fair enough, but Crum’s just begun to display his firm grasp of the obvious.

If Jobs is out of tricks, and Apple’s sales start to slow, many of the growth-fund managers who’ve bought its stock may become sellers.

Indeed! And if Steve Jobs eat an infant on live TV, it could adversely affect the company’s share price!

Crum provides some cause to be concerned about future iPod sales, mostly due to the maturation of the market, but lays it on a little thick.

And it’s not like Apple will have the media-player market to itself.

Like it does now.

Uh, what?

Microsoft plans to spend heavily to market its new player, which it rolled out in November. While the product didn’t exactly set the world on fire at the beginning of the key holiday-shopping season — its sales through lagged well behind those for a half-dozen iPod models and even an iPod adapter — Microsoft has a history of tenacity and is expected to produce 10 million of the devices next year.

Two points about this:

  1. “Produce” != “sell”.
  2. In the last year, Apple’s sold an average of almost 10 million iPods a quarter.

“We think Microsoft will be Apple’s most formidable competitor,” said Prudential analyst Tortora, who has a neutral rating on Apple shares.

Truthfully, it remains to be seen if the Zune will be able to make much headway in 2007. With a starting price point of $250, it’s simply not in a position to take on “the iPod”, which consists of three (soon to be four?) separate lines, starting at $80.

But ask the Macalope again when the Zune 2.0 comes out.

Tortora, apparently, is not one of the bulls mentioned in the title. It does seems a bit odd that in a piece ostensibly about bulls, the first two quotes from analysts are rather bearish. It’s not like the bullish opinions on Apple should be hard to find. The Macalope took a look and of the last 21 firms to change their rating or initiate coverage on Apple, 17 have above-average recommendations and four are neutral.

Several analysts have already noted their expectations that iPod sales will be strong this quarter and may even beat the prior year, which was really, really big.

Crum’s point, muddled by some silliness, is about growth. Apple’s been a Wall Street darling of late because of it and it might be concerning to you if you lived in a cave and hadn’t heard anything about what Apple might have on the drawing boards for 2007. But between the iTV and rumors of the iPhone, the “true” video iPod, a lightweight laptop and a tablet device, there’s little reason for growth-fund managers to start selling Apple now.

Note: the title is the punch line from an old joke about what Adam said to Eve.

Disclaimer: the Macalope holds an insignificant number of Apple shares.

  • Bill:

    Macalope: What else could Apple possibly do to increase growth?

    1. The iPhone is a flop — none of the carriers offer it and clearly the market won’t give anyone except Microsoft another chance to get anything right.

    2. The ‘real’ video iPod continues to be Gruber-defined vaporware and clearly no one is buying the current ‘5G iPod’ because they all know that Apple is supposed to be working on a real video Pod.

    3. The MacTablet is terrible — I don’t know anybody who has one.

    4. What is Apple going to do, sell software and hardware?

    Thank goodness we have Rex Crum on the case!

  • i think apple stock would be adversely affected ONLY if it were a LIVE infant. or a puppy.

  • This commentator hates to point out the pedantic, but he feels that in this case, it is his duty. This commentator feels that while this entry is amusing and a good rebuttal of the linked article, he must point out that what is termed the first sentence of an article is actually spelled “lead”, not “lede”.

    This commentator hopes that the Macalope will fix this error sooner rather than later, so that other spelling nazis will not have to claw their eyes out.

  • Korivak:

    Everyone seems to be so used to companies constantly overpromising and underdelivering that they keep underestimating how aggressive Apple is. Anyone that thinks that Apple has run out of ideas obviously hasn’t been paying attention.

  • When (and if) Apple enters the phone business, Microsoft will feel compelled to follow. At that point, the latter company will be spread too thin to do anything even passably well. Meaning: well enough to be decently treated by the lemmings. Note their entry into the music player market five years late juxtaposed with their recent release of Vista (Tiger on quaaludes).

    Punditry in the main is lukewarm about Vista. If it was anything more than total crap, the peons who slaver at the mention of Microsoft would be proclaiming it a Mac-killer. Ditto, Zune. They couldn’t devote or allow enough creativity to make either product market-worthy.

    Microsoft is a bureaucracy – bloated and inertial. They can’t even do anything creative inside the box, much less think outside of it. Apple is pushing them to implosion. Ten will get you twenty it isn’t an unintended consequence.

  • Al:


    How can the iPhone be a flop when it hasn’t even been announced yet, let alone been released. It is less than vaporware.

    The MacTablet does not exist either.

    Yes, all Apple does is sell hardware and software. The software just makes it easier to sell the hardware. The media sales just break even. They are there just to sell the hardware as well.

    How can you comment on a company you know absolutely nothing about?

  • fudo:


    deploy sarcasm detector, then try again.

  • Ken:

    Hate to say it, Rip, but Microsoft’s already in the phone business. And they’re not doing too poorly, either. Sure, Blackberry’s holding on strong with their smartphones, but Palm’s slipping, and I don’t know of any others. It’s not like the iPod in all ways.

  • Simone,

    The Macalope looks that damn word up every time he has to spell it and it can be spelled both ways. If you don’t believe him, please believe the New York Times.

  • Scott:

    10 million Zunes next year!?!???

    That’s funny, even M$ most rosy picture for Zune calls for ONE million Zunes by July 2007. ONE million in the first 8 months then 9 million in the next six. Talk about accelerating sales!

    All of this assumes, Apply, Sony, SanDisk, Creative, iRiver, Toshiba, RCA, COBY, Archos, Samsung, Nextar, MobiBLU, iAudio, Philips, (insert more Chinese and Korean manufacturers here) etc., etc., etc., all sit around and do nothing new from here on out. The iPod ain’t the only game in town (though you can have mine when you pry it from my cold, dead fingers) and the WMA/Windoze DAP market is very, very crowded; almost all of which are more mature, more capable, and compete in more market segments than the Zune.

    M$ will have to actually compete this time, something it is particularly bad at. And quickly, something it is REALLY bad at. Just like they don’t give Payton Manning SuperBowl MVP just for showing up for work in September, they’re going to have to actually play this game to win.

  • This commentator believes that looking to the New York Times for correct spelling (instead of, say, a dictionary, in which mine does not have the word “lede”) is akin to citing Wikipedia as a source in a scientific paper.

    Nevertheless, the alternative definition given by the Macalope does indeed seem to be legitimate, and therefore this commentator will refrain from forcing the Macalope to adopt the more common spelling.

  • Gah! This commentator apologizes for accidentally using the word “mine”, which is a first person pronoun. He meant to use the word “his” instead. Apologies.

  • Michael:

    The commentator is correct. Among working journalists, “lede” is the preferred and almost exclusively used spelling, no matter what the dictionary says.

  • Blain:

    Agreed, Ken. There was a review linked from Daring Fireball a few months back, from a mac user, actually praising Windows Mobile, even to the point of, “Maybe Microsoft should quit trying to make OS’s for PC’s and focus on their mobile OS.”

    So it’s not a one-sided win. Actually, that could be a great barrier, if the iPhone (Were such a beast to be) didn’t have Outlook and other ties on the PC side right out of the gate.

  • Hans:

    Mr. Cardwell,

    Would that be a *cute* live infant?

    These things matter, you know.

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