Why investors are better off without Macworld
Apple (AAPL) may have dropped nearly 7% on the news that Steve Jobs is blowing off Macworld, but according to Bullish Cross' Andy Zaky, investors should be happy he did.
In an unpublished analysis of the company's last four major press events — starting with Macworld 2008 and ending with October's Spotlight on Notebooks — Zaky documents a pattern that's become increasingly self-destructive.
"All of Apple's media events," he writes, "are met with crazy rumor mongering, irrationally exuberant speculation and undue rants about Steve Jobs' health."
The result is that almost every Apple extravaganza since Macworld 2007 — no matter what news comes out of it — has triggered a massive sell-off of Apple stock.
Take, for example, the effect on the share price of the last four press events:
The nearly 11% drop last June is probably the most shocking, given the rave reviews, the huge lines and the sales the iPhone 3G has continued to rack up.
The release of the new iPhone — like nearly every Apple event this year — was billed by traders as "buy on the rumor, sell on the news." Instead, says Zaky, they've been selling on the rumor AND on the news.
If that's how Wall Street is going to react to these things, why bother having them?
Not that Zaky is suggesting that Wall Street figured into Steve Jobs' Macworld decision, one way or the other. "Personally," he says, "I think Apple cares less about its shareholders than almost any other company out there."
What he is suggesting is that the event-marketing strategies Steve Jobs uses to draw attention to his products may work for him, but they aren't working any more for his investors.
I sure hope to hell that something is going to help investors. Apple's stock is getting all crapped over by WS. All these theatrics and showmanship might be good for Apple fans, but the media is getting downright sick of it. It's like everytime Apple holds an event, the media and analysts are yawning. Boring this and boring that. Nothing new so Apple's run out of innovation. Let's degrade the stock since their new computers can't manage time travel. Those people don't deserve to go to MacWorld to have a good time. The unibody notebooks got dumped all over. Why? Because it's just a manufacturing technique that means nothing because nobody sees it. Such stupidity. I suppose since the economy is bad, MacWorld isn't worth the returns. All I know is that I'm in favor of anything that will get Apple's stock back on track. If it's the end of MacWorld, fine with me. RIM doesn't have a BlackBerryWorld and I don't see them doing any worse than Apple.
I'll miss Macworld Expo. I've gone to every one since the early '90s. But I can't see how this is bad for Apple. Ten years ago, Macworld Expo was THE way to reach customers. But then, MacWEEK magazine was THE way to get news and info about Apple, and that's gone too. Apple news and info is EVERYWHERE today. Times change.
It may be sad that Macworld Expo is gone, but it's not bad.
Nobody NEEDS Apples products, but everybody WANTS Apples products.
Any time you want a product rather than just need it, you will do anything to get it.
MacWorld was part of making people Want Apples products. Without some sort of replacement and people are rather cynical of Apples own staged events, so Apple will need to find some sort of replacement for MacWorld.
It is that simple.
Perhaps this is best for investors, but for Apple's loyal customers, the death for MacWorld is not a good sign.
I can agree that January is not the best time for a keynote. And I can agree that it is better for Apple to control the event. However, the keynotes were spectacular free advertising worth as much as $400M each. They were iconic. They had become part of the culture. That is a lot to walk away from.
Macworld may not be the solution. Apple should have a consumer event sometime in the year as a counterpart to the developer event held in June. Apple products are not simple utilitarian devices for running spread sheets or filling in for cash registers. There should be an event to act as a focal point for the many end users who use Apple products to amplify their careers and lives. This would be good for Apple's market share and it would be good as a way to keep in touch with the more active and creative individuals who use Apple products.
"Now let’s look back at Apple’s small press events. You could hear the audience yawn when…"
That's because those are press events. If you want cheering and clapping, maybe Apple could dub those in afterwards. If you think it's all about the reaction, then you're missing the point. It is about the products, and you shouldn't need the help of the audience to get excited… you're going to like the product or not. Furthemore, every product Apple releases does not need to be a "game changing" product. Not sure when or why people decided it must be a dud if it doesn't.
Want a bet?
if (and I sincerely hope not) Steve Jobs will retire due to health reasons, then the analysts and bloggers will find reasosns and claim that this is "good for AAPL?
if a company cares about its products, customers, business operations and integrity it won't have to care about its shareholders. They will be rewarded. At least that is how business should work.
Please show me even one compelling reason why Apple needs MacWorld. Ten years ago, yes, they needed trade shows. Now…
1. The internet generates an almost constant stream of info and buzz about Apple and it's products
2. Over 200 Apple Stores and counting
3. WWDC generates mo' better buzz than any trade show and provides the perfect platform for a "State of the Apple" vision keynote.
4. Apple can call a special "Apple Event" at the Cupertino Campus anytime it wants. It costs next to nothing and generates as much buzz as any trade show.
5. Let's see, E3, Comdex, MacExpo Boston, how are those things working out.
Let's compare MacWorld with Apple's private press events, shall we?
Apple was nothing in 1997. Now they have $30 billion in the bank. Tell me that 2000 cheering Mac fans watching Steve's rock show didn't have something to do with that. After the keynote, the whole world was talking about Apple's products.
Now let's look back at Apple's small press events. You could hear the audience yawn when Steve introduced the iPod Hi-Fi, which failed miserably. How about the 5 people clapping when Steve introduced the current round of iPods?
Apple's yearly rock show built up excitement. Without it, they come closer to being just another electronics company.
These events were a sure thing for short sellers. It was obvious long before now. I totally agree with this move.
Finally, someone suggests Apple is doing something for a positive rational reason. Like so many pronouncements (we won't license the OS, we won't build cheap machines, we will build brick and mortar stores), this announcement has been greeted with shocked worry–how could they? Regardless of whether stock price was the real rationale, it's nice to see a reporter who can assign SOME rationale rather than reading in rumors and irrational motives to choices that, in the end, often work out beautifully…
It will be interesting to see what they do next, but whatever it is, it will probably boost their sales and market share, as ever.
Greg Bates
Hmmm… is there a connection between not caring about your shareholders and being innovative and successful?
If more companies would drop the stupid short-term fear of some number going up or down they could actually focus on creating products that customers can use and that sell themselves.