One presumes that Don Tennant would conclude that Apple’s emphasis on maintaining high margins is the reason child labor has been found to have been used by the Chinese companies that supply it, Dell, HP, Lenovo and other computer makers.
Couldn’t be China’s fault.
OK, there’s bitching and then there’s primo grade-A bitching.
Macworld Already a Bummer, With or Without Apple.
“Worst. Macworld. Ever.” said one attendee after the Tuesday keynote. “This sucks.”
This displays little more than a lack of proper historical perspective. Gil Amelio ring any bells? Please, let’s not review the tape, people. It could get ugly.
It also displays a lack of proper verbiage. More correctly, the attendee should have said “Worst. Macworld. Expo. Keynote. Ever.” as he or she could not have been to the showroom floor yet.
Also, there’s all the drinking. We’re not nearly done with that.
This year’s keynote was an epic yawner.
Personally, while the keynote obviously lacked the big announcements of recent years, the Macalope found the iLife demonstration to be awesome, and the crowd seemed to agree.
No new iPhone.
Please. No serious analyst thought there would be a new iPhone.
No new iPod.
iPod? Nobody at all thought there would be new iPods.
No new iMac, and — despite lots of pre-show hype, rumor and buzz — no new Mac Mini.
Yes. A bunch of people thought there might be a new Mini and maybe a new iMac. But did Apple in any way shape or form lead anyone to believe there would be? No. This kind of sentence construction is designed to make you think that it’s somehow a failure on Apple’s part that they didn’t deliver an iMac or a Mini. It’s not.
You can be disappointed that Apple didn’t announce more (and, don’t be mistaken, the Macalope is) but you’re just being a tool if you’re claiming to be disappointed because Apple didn’t announce specific items “everyone said they were going to announce”.
The keynote also ended with a thinly veiled insult: Tony Bennett singing “I Left My Heart in San Francisco” — surely a goodbye middle finger to International Data Group, which owns Macworld Expo.
Of course it seems to be a middle finger if you’re the kind of person who sees everything through the prism of motives that appeal to your high-school Heathers mentality. The horny one actually thought it was a nice send-off.
Was it a great keynote? Well, no. Phil Schiller actually did a great job delivering it. Has anyone watched CEOs from other companies? They’d be lucky to have their keynotes delivered by Schiller, let alone Jobs. Apple followers are spoiled.
The problem is he just didn’t have that much to announce. But expecting pie-in-sky items like new iPhones and iPods is just jackassery in the third degree.
The Macalope will have some more thoughts on the keynote in his piece for Macworld on Thursday.
ADDENDUM: The Macalope, while not shy about profanity, doesn’t usually point it directly at a silly pundit, but in this case he’s going to make an exception for this:
Topping it off was Tony Bennett, who came onstage and belted out a couple of songs nobody under 60 knows.
Well, a pleasant fuck you to you, Mathew. The Macalope is well below 60 and was utterly thrilled to see a legend like Tony Bennett singing classic songs. Unless you go to Vegas frequently, this was a once-in-a-lifetime chance to see someone whose name will go down in history as one of the greatest performers. And so far everyone the Macalope’s talked to has raved about it.
Don’t be a dick.
BusinessWeek’s Peter Burrows jumps on Jobs’ health right out of the gate. Maybe Jobs is sick, maybe he isn’t. The truth of the matter is that Macworld just doesn’t make sense for Apple anymore. Burrows doesn’t get it.
Here we have a company with $27 billion in the bank, that gets massive, global exposure from a talk that rarely lasts two hours. If Apple can’t see the ROI in Macworld, what company can justify the tradeshow bill?
Apple gets “massive, global exposure” when it sneezes. They’re the perfect example of a company that doesn’t need a trade show. Why go to all this trouble when all people have to do to learn more about your products is wander into one of your stores or open up a newspaper?
It’s still a sad moment for the Macalope. Macworld has been the place to get to know other Applephiles for 20 years. He won’t miss the conference, but he will miss the partying.
Jobs and Gates trade jests at rare joint appearance.
“PC guy is great, he’s got a big heart,” the chief of Apple Inc. said…
People let me tell you ’bout my best friend,
He’s a warm hearted person who’ll love me till the end.
Jobs, 52, and Gates, 51, reminisced about the industry and old partnerships. The tone was jovial, even sentimental, but Jobs did get in a few good-natured digs.
People let me tell you bout my best friend,
He’s a one boy cuddly toy, my up, my down, my pride and joy.
At one point, Gates said employees working on Microsoft’s Zune portable media player admired Apple for creating the market for such devices with its hugely successful iPod line.
“And we love them because they’re all customers!” countered Jobs.
People let me tell you ’bout him he’s so much fun
Whether we’re talkin’ man to man or whether we’re talking son to son.
“We’ve kept our marriage secret for over a decade now,” Jobs said, to roars of laughter.
Cause he’s my best friend.
Yes he’s my best friend.
Macworld provides an awesome summary of the Apple options scandal to date if you’re just tuning in.
As a teacher of the Macalope’s liked to say, “There are no stupid questions, Macalope. Only stupid people.”
Which brings us to eWeek’s Joe Wilcox who asks Did Vista Sap Mac Sales?
“Sap Mac sales”? What conference call were you listening to?
After a year of gains, Mac shipments declined during Apple’s fiscal 2007 second quarter. Is Vista a reason?
Mac shipments declined? What? No, they didn’t. They were up 36%.
Sequentially, overall Mac shipments declined 6 percent, as measured in units and dollars, between Apple’s fiscal first and second quarters.
Oh, fer…
Not the old “quarter to quarter” crap again. C’mon!
And the “years of gains” part isn’t even correct and Wilcox’s own chart shows that. You know, if you’re looking at sequential quarters — apart from asking yourself why on God’s green earth you’re doing that — you might want to actually look at the data before you make generalizations.
“Years of gains”? No. Mac sales declined slightly a quarter ago and, duh, more significantly… exactly one year ago!
But Wilcox has apparently only just heard of this “cyclicality” of which we speak.
The word from analysts: No impact. The declines are seasonable, and typical for Apple and less than fiscal 2006 second quarter.
Uh, you know, Joe, you can actually do that calculation yourself. You don’t need to call some fancy high-paid analyst. Just get the ol’ slide rule out and let ‘er rip!
What’s funny about Wilcox’s piece is the underlying “Uh… no…” tone in all the quotes he gets.
“I wouldn’t read too much into a sequential decline,” said David Daoud, manager of IDC’s personal computing and PC tracker programs.
You can almost hear Daoud scratching his head and speaking… very… slowly…
This one is better, though:
“Sales always decline from [Apple's] Q1 to Q2 because of seasonality,” said Stephen Baker, NPD’s vice president of industry analysis. “A better question would be if the sequential decline this year was more or less than the sequential decline last year.”
“Sales always decline this quarter, you numbskull, and, uh, your question sucks.”
Now, one might argue that Wilcox only asked a question and faithfully reported the answer.
So what’s wrong with that?
What’s wrong is that the question is so misplaced. Did he really think Apple’s results were a bad thing? How could he have missed the multitude of reports that Mac sales soared? How could he have missed Apple’s stock price ripping past 100?
Astounding.
MarketWatch reports Apple’s earnings were up 88% in the second quarter, with sales up 20%. They womped earnings per share estimates by 36%.
Stock’s hovering at 103 in after-hours trading.
Business 2.0′s Owen Thomas is live-blogging the conference call.
The Macalope found this bit about how they’re going to account for iPhone sales interesting (well, as much as accounting can ever be interesting, anyway).
Because Apple is going to keep introducing new software features for free, it’s going to account for sales and earnings from the iPhone on a subscription basis for 24 months after the sale of a handset.
…
Translation: Investors should keep a careful eye on unit sales and cash flow from operations, not just GAAP revenues and net income.
Also means the company won’t have a repeat of the 802.11n enabler charge issue.
Tim Cook also claims the Leopard delay is a “one-time event”.
Also worth noting:
Apple has started to capitalize some of its software development, which has the effect of depressing apparent R&D spending. CFO Peter Oppenheimer says if you factor the capitalized software back in, R&D spending is going up.
The Macalope has made a mental note to keep an eye out for unwarranted griping that Apple’s R&D spending is going down.
Silly comment by Thomas about why Apple isn’t dropping prices as some component prices decrease:
Cook points out that Mac and iPod sales continued to grow at current prices. I think that means that Apple is not just sticking it to its suppliers, it’s sticking it to its customers, too.
Supply? Demand? Any of these things ring a bell, Owen?
UPDATE: Responding to a commenter who raises the same issue the Macalope did, Thomas says:
Clearly, keeping prices high is not hurting Apple, and executives may be hesitant to drop prices since they may not be able to raise them later if commodity prices rebound. But for now, Apple is getting away with charging customers considerably more for iPods and Macs than it’s costing Apple to make them.
What?!
Dude, that’s called margin!
Yeah, customers might not like it, but having a high margin with increasing sales? Investors eat that up with a spoon!
Brace yourself again, because Fred Anderson issued a statement today that says in part:
“Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on Jan. 2, 2001,” Roth said in a statement.
“At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge,” the statement said.
Anderson was told by Jobs that the board had given its prior approval and that the board would legally verify it, according to the statement, which added: “Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.”
Anderson has paid $3.5 million to settle the difference in the options price from the strike date and the date they were approved and $150,000 as a fine.
But, wait… January 2, 2001?
Yes, January 2, 2001.
But Steve’s options for 2001 were granted in October, not January.
Oh. Really?
Yes. So these grants were not for Jobs, they were for other Apple executives.
Huh.
Are you still here, Billy? The Macalope just needed you as a rhetorical device. You can go now.
OK. Thanks, Mr. Macalope.
Heh. Little scamp.
Anyway, Anderson’s statement goes on to say:
With respect to the October 2001 grant to Mr. Jobs that is also the subject of the complaint, Fred had virtually no involvement as he was not a member of the Board and did not have a formal role in compensation matters pertaining to the CEO. Fred had absolutely no knowledge of any alteration of Board documents and this is reflected by the fact that he is not even mentioned in those charges.
Well, then, that just leaves Nancy Heinen and Steve Jobs. And you will remember that Jobs’ October 2001 grant was the one with the forged board meeting. And now Anderson has indicated that he already made Jobs aware of some of the “accounting implications”.
Hmm.
Now the Macalope is wondering why the SEC has decided not to go after Jobs (assuming the San Jose Mercury News item was correct) unless it’s decided to let him slide on the fact that he turned those options in, which seems unlikely.
If one is looking for comfort in this news, one might take it in the SEC’s willingness to let Anderson settle.
UPDATE: Or, maybe he didn’t: SEC statement (tip o’ the antlers to swift in comments).
The Commission also announced today that it would not bring any enforcement action against Apple based in part on its swift, extensive, and extraordinary cooperation in the Commission’s investigation. Apple’s cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct.
Although, Apple != Jobs.
Well… at least not in the legal sense.
Another Update: Great post by Fortune’s Roger Parloff with a lot of details that the Macalope has never seen before (tip o’ the antlers to Daring Fireball).
Parloff notes that Jobs was granted new options for October of 2001 not because of the impending introduction of the iPod but simply because his existing options were under water. Still, the introduction of the iPod could be considered a significant enough event to more adequately re-associate Jobs’ compensation with the company’s performance from then on, but that’s the Macalope’s theory.
The San Jose Mercury News reported yesterday that it appears unlikely that Steve Jobs will be charged by the SEC in the options backdating scandal.
If the Macalope may riff on David Maynor (without the bad grammar), brace yourself for the flood of anti-Apple posts about why Steve Jobs is getting a free pass.
Long-time readers know the Macalope’s position on this, but there’s a substantial difference in suspecting or guessing that Steve Jobs is getting away with something and knowing that he is.
The Merc notes today that the fickle finger of fate now points to Nancy Heinen and Fred Anderson. So far this game is playing out pretty much according to Apple’s playbook.
But that’s because Apple’s an unstoppable killer marketing machine!
Whew. Aren’t you glad George Ou doesn’t cover the Apple options scandal?
UPDATE: Apple Insider sez the Wall Street Journal reports that Anderson has settled with the SEC. This is more evidence they’re unlikely to go after Jobs. Actually, it’s probably the evidence the Merc’s story was based on.