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Don’t pray or cry for Apple

Wednesday, 27 April, 2016

On 12 December 1980, the Apple IPO saw 4.6 million shares being offered at $22 each. Steve Jobs made $217 million that day, and when the closing bell rang on Wall Street, the stock price had jumped 32 percent to $29, giving the company a market value of $1.7 billion. Lotsa bubbly. Champagne times.

Fast forward to this day, 27 April, in 1997, and sobriety had set in. The Apple share price closed at $17 and the doomsayers were so emboldened by this decline that Wired magazine published a famous cover story in June urging distressed Apple fans to Pray. The company needed divine intervention due to “a confusing product line, little inspiration from the top, software developers fleeing.” 101 solutions were offered, starting with, “1. Admit it. You’re out of the hardware game. Outsource your hardware production, or scrap it entirely, to compete more directly with Microsoft without the liability of manufacturing boxes,” and ending with, “101. Don’t worry. You’ll survive. It’s Netscape we should really worry about.”

In between, there was “27. Relocate the company to Bangalore and make it cheap, cheap, cheap,” “52. Return to the heady days of yore by insisting that Steve Jobs regrow his beard,” and “81. Merge with Sega and become a game company.”

All of this is by way of background to the news that Apple has reported a fall in quarterly sales, the first time its revenue has fallen in 13 years. Apple shares were hovering around $104 when the company released its report yesterday. Half an hour later, the stock price had declined eight percent to under $97. For those prone to panic, it’s worth noting that Apple has a cash hoard of $233 billion, which is more than all the foreign currency reverses around the world, and with a market capitalization $575 billion, it’s the world’s most valuable publicly traded company. Hold those tears.

People have become impatient with Apple because it doesn’t produce something amazing every 12 months. The reality, however, is that major technological innovation is the exception, not the rule. Iteration of the existing product line is the pedestrian norm. Apple has some big cards up its sleeve, however. The company is said to be working on an electric car, stealing engineers from Tesla and looking for test locations in California. It is also filing patents that suggest it’s toying with some kind of a virtual reality device. There’s no need to cry or pray for Apple.

Wired Apple Pray


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