Apple shares fell about 5% on the opening of trading on Wednesday on news that third quarter earnings did not meet expectations. With a market capitalization of over $370 billion, a 5% loss represents almost $20 billion. Apple's fourth quarter ended Sept. 24. Despite incredible sales of 17 million iPhones during that period, representing a 21% increase over the same period a year earlier, this was less than the 20 million projected.
On Sept. 21, Al Gore was reported to have let the cat out of the bag by confirming rumours that a new iPhone would be released in October.
Did Gore's premature announcement contribute to any potential iPhone customers not making a purchase that they otherwise would have? Al Gore is an Apple board member and, as such, any public pronouncement he makes holds much more weight than rumours circulating on the Internet. Confidentiality of board proceedings is a sacred trust.
A financial quarter represents one-fourth of a year: 91 days. Gore's announcement came just three days before the quarter ended which prorates to 3% of a quarter. So, at worst, Gore contributed to 3% of the billions in equity value loss.
However, this is no small loss when dealing with such big numbers. 3% of $20 billion is $600 million. And someone who was set to sell their Apple stocks Wednesday morning lost money that they may otherwise not have lost had Al Gore not opened his big mouth.
Mr. Gore had better hope that Apple has been current on paying premiums on its Director and Officer Liability Insurance which, amongst over protections, is designed to shield against "claims against a public company for stock prices that are too low or that caused shareholders to lose money..."
Tony Kondaks' latest obsession is the national debt debate, which he has reduced to its essence: two pies and a squiggle. You can read all about it at his website located at www.winifyoulosegold.com.
This blog originally was published at The American Thinker.
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The projections were off, Apple introduced a modified iPhone 4 later than they normally would leading to speculation that it would be an iPhone 5. When it wasn't sales weren't as high as "projected".
The sales would not be lost just shifted.
iPhone 4S is selling twice as fast as iPhone 4.
No.
That was easy.
First of all apple's earnings came up more than 3 percent under expectations, and even if Al Gore's slip completely zeroed iPhone 4 sales iPhone sales, although the largest contributor, are only one of many revenue streams.
Besides the whole internet was aflame with rumors, and had been for almost three months, about the new iPhones that would be available any time now and what they would do.
Apple had kept a rigid annual announcement schedule regarding new iPhones, So the expectation mill had been set months earlier. I have absolutely no doubt that the iPhone4s was wamted to be announced at WWDC just likes its predecessors but something, I suspect a shortage of A5 chips, held it up. When Apple moved the announcement of the new iPhone from Q3 to Q4 of course it hurt meeting their expectations because for the first time in years the Q3 was going to not have a new iPhone but one over a year old! And by failing to manage the rumor mill it had another three months to run rampant about the 'iPhone5' being announced any day now. And you want to blame ALL the postponed sales on Al Gore? You must be kidding!
http://en.wikipedia.org/wiki/Osborne_effect
The sales of phones will show up in one quarter or another anyway. Gore just bought Apple some goodwill by not letting customers get sucked into the old model, but rather allowed them to wait a few weeks for a better product.
In the larger sense, that's where capitalism goes horribly wrong -- when it tries to maximize short term profits at the expense of its customers and long term viability. Well done, Al!
Great article Tony and it's good to know there's someone like you to fill us in on who's steering the ship :):)