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'Can Apple maintain profitability?' Yes.

by Kelly Guimont Jan 4th 2011 at 10:00AM

Seriously? This is the question of the day? When people are still voicing serious and legitimate concerns about the rest of the economy? We're talking about a company with enough money in the bank to make a Goldman Sachs-sized investment in Facebook if it wanted to, more than triple the amount Dell had in the bank at the end of the last quarter, plus more than five times the amount HP had too, while we're at it.

Let's look at a number for a minute: Apple has 51 billion dollars in cash. That's 51,000,000,000 bucks. Or, approximately the amount of money it takes to fill a vault-slash-swimming-pool. Who has that kind of money these days and didn't get it via government bailout? Apple, that's who. What is its secret? It made that money the old-fashioned way, by selling new-fashioned things.

In a time when few companies are profitable and everyone's excited about a flat line since it isn't a downward curve, Apple is making money iHand over iFist. One could presume from this that analysts and others who watch CNBC professionally would be excited about a company with growth and profitability in the current climate. However, that's not the case.

Remember when Apple wasn't doing well? Those bygone days when people may have actually believed the name of the company was "Beleaguered Apple Computer?" Well, once Uncle Steve made his return in 1996, that started to turn around. Apple Computer started making things that start with "i," and in 2001 with the launch of the iPod, Apple was officially cool again. You know, unless you were an analyst on Wall Street, in which case Apple wasn't cool, it was just less lame than before. But seriously, have you seen what sort of stock prices Dell and HP have these days? Now those are tech companies.

I call shenanigans! Now, instead of being impressed with profitability, the question is "Oh sure, you're all profitable, but can you stay that way?" Apple hasn't proven that yet? Explain to me how making ANY money in a time of unprecedented financial volatility is something that gets played down. What will it take before Apple gets a fair shake? A brand new device that sells a million units in three months? Try two and a half. A new version of the same thing released a year later, how long did that take to sell a million? Three days.

Find and replace "Apple" with a non-tech company in some of these articles and see if it still makes as much sense. Just the iPhone product line by itself is bigger than Coca-Cola, but Apple still gets dismissed like this?

Someone needs to have a little heart-to-heart talk with some of these guys. Apparently they've all had their heads down in their BlackBerrys for so long that they don't realize it's cool these days to carry around something Designed In Cupertino. Clearly a lot of other people have figured it out -- what's stopping Wall Street from seeing the light?



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Seriously? This is the question of the day? When people are still voicing serious and legitimate concerns about the rest of the economy?...
 

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28 Comments

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zmaxman

Sometimes it is best to just let the product speak for itself .... and everything Mac speaks volumes. Wait for the big purchase - $50 billion will by a lot of the competition.

January 04 2011 at 7:48 PM Report abuse rate up rate down Reply
Lady Whimsy

I think what irks me is that Apple is often seen as a "young people's" company by the stodgy folks on Wall Street. It took my entire family switching to Apple for my dad (a patent lawyer) to see that Apple isn't just about college-age consumers, but about families, education, and business too.

Sure, I *am* a young person, but that's besides the point. ;)

January 04 2011 at 6:31 PM Report abuse rate up rate down Reply
carl

WHO CARES. Your own point here is valid enough to completely void any need to write it in the first place. Report news and updates... Not your hurt feelings, please. This is the reason blogs still aren't taken seriously yet.

January 04 2011 at 3:34 PM Report abuse rate up rate down Reply
Steve

About the only other thing Apple could do that might turn heads on Wall Street would be to bring their manufacturing here to the US. That of course would never happen, but imagine the Tech Giant that Apple has become and how many US jobs they would create.

(sarcasm) Apple could singlehandedly bring this country out of the recession that it still is in!!! (/sarcasm)

January 04 2011 at 2:16 PM Report abuse rate up rate down Reply
Mr Lizard

I sense this has got you wound up a bit....!

Chill, kick back, and worry less about these fools. I was getting a heart attack just reading that post!

Gruber takes these kind of folk down a peg or two without getting so worked up.

:^)

January 04 2011 at 1:12 PM Report abuse rate up rate down Reply
Prognosticator

Apple is Doooomed, I tell ya.

January 04 2011 at 12:31 PM Report abuse rate up rate down Reply
Noah Ramon

Hey - there's a fine and noble tradition of analysts yelling about Apple's doom to manipulate the market for their own benefit. (See also Jim Cramer's appearance on The Daily Show where he frickin' admits doing it.)

Unfortunately, when people with the ability to steer financial industry trends are playing in the same game as everyone else in said industry, you're depending on their ethics to do the right thing - and you've got a whelk's chance in a supernova of that actually working.

January 04 2011 at 12:26 PM Report abuse rate up rate down Reply
richard

I have never understood it - except that these people have never gotten over the fall of their beloved MS story and can't change gears from the time when it was cool to diss the struggling company with the unserious name Apple. Apple became profitable when they weren't looking, and it did it against their predictions (capital offense!), and did it with unheard-of products that meet the needs of a largely non-tech population! Gone are the days when anyone is rewarded for ingenuity, and creativity in the market. If you don't make money by pushing paper, buying and dismantling other companies, or by sheer chicanery instead of manufacturing a product, you just don't deserve any credit.

January 04 2011 at 11:55 AM Report abuse rate up rate down Reply
synthbreak

"Seriously? This is the question of the day?"

You wrote about it, didn't you?

January 04 2011 at 11:53 AM Report abuse rate up rate down Reply
OlsonBW

It doesn't matter how much money they have in the bank now. What the question was, is whether than can CONTINUE to make money.

My answer is yes, but you were way off track in the article.

January 04 2011 at 11:51 AM Report abuse rate up rate down Reply
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