A basic tenet of running a public company is that if you want your stock price to go up, you ought to exceed analysts' revenue and EPS expectations and raise your guidance.
Sadly for Apple investors, CEO Tim Cook will not be following that tenet when it reports results for the quarter ending this December.
Before getting into that, it is worth pointing out that it has been a decade since Apple has introducing anything innovative. How so? If you look back at Apple's history you see that the company entered big existing markets -- like MP3 players, cell phones, and tablets -- and transformed those markets with much better products than the ones that rivals were selling. What's more, people were willing to pay a price premium for those products and Apple was able to manufacture them cheaply and earn a substantial profit margin.
Of the three products which reflected Apple's innovation, the one that makes most of the difference for Apple investors is the iPhone that was introduced in 2007. That would be fine were it not for a law of business above which Apple cannot stand: unless you have erected tall barriers to entry, a big profitable market will attract rivals. And there are plenty of competitors selling smart phones these days and Huawei, Oppo and BBK accounted for 21.3 percent of smartphones sold to end users worldwide during the fourth quarter of 2016, an increase of 7.3 percentage points year on year, according to Gartner.
As the world's press worshipfully reported, Apple announced what amounts to tiny tweaks to this mature product and proposed to sell one of the versions for $999. On its new campus -- which raised the specter of an edifice complex (the arrogance required to build a gigantic corporate fortress that has preceded the fall of many companies including Enron) -- Apple introduced five products, according to CNBC:
- iPhone X, which he says will set the path of technology for the next decade. "It is the biggest leap forward since the original iPhone. features a completely new look, with a screen that stretches from edge to edge, and gets rid of the home button that's been on every other iPhone since 2007. Apple's also making a big push into "augmented reality," where images from apps are superimposed over live video captured by the camera."
- iPhone 8 and iPhone 8 Plus, "with aerospace-grade materials, a better display and speakers, and super-strong glass exterior reinforced with steel. The glass back allows the phones to have wireless charging. The iPhone 8 Plus will be $799."
- 4K Apple TV -- "a new set-top box that supports sharper resolution TV shows and movies, Apple TV 4K. Orders start on Sept. 15, and it will be available on Sept. 22. The 4K TV will be $179 for a 32 GB version, and $199 for a 64 GB version."; and
- Apple Watch Series 3, with "cellular built in, streaming for millions of songs, and support for speaking from Siri."
