Why the bar gets raised for Apple

What's up Jobs' sleeve this time around?

The guessing game is almost over. On Tuesday, Apple will hold a press conference here in San Francisco to announce--well, Apple's invite just says "Let's Rock." But unless 99.99 percent of the blogging and journalistic world is wrong--a phenomenon hardly unknown--Apple's going to announce a refresh of its iPod line.

In March, the audio chipmaker Wolfson told its shareholders that it had failed to win a contract to design next-generation media players for "a major Tier 1 customer" planning a third-quarter launch. Wonder who that might be? The September launch date is a no-brainer as that's when Apple and every other tech appliance maker tries to get as many new units as possible into the market ahead of the holiday shopping season.

Earlier Friday, I spoke with Tom Krazit about what Jobs likely will announce--as well as the chances for a redesign of the iPod Nano as well as rumors of a new version of ITunes.

The bar usually gets set higher when it comes to Apple product launches--and this time around it is no different. There likely will be even more than the predictably insane scrutiny because of the glitches which accompanied the introductions of the iPhone 3G and MobileMe.

Redesign for the Nano?

Still, I haven't heard anyone at Apple complaining about the company being unfairly singled out. This just goes with the role of being the media's favorite eye candy. Besides, I'd wager that over the years Apple has received millions of dollars in free publicity by cranking up the buzz machine in advance of official technology debuts.

Apple's flaks may have stewed, but each time the company got dinged by Fake Steve Jobs it was worth its weight in marketing gold. Seriously, outside of family members and confirmed sadomasochists, just how many people would be sufficiently interested to read a blog called Fake Mark Hurd or (gasp!) Fake Sam Palmisano?

But there's no need to overthink this. Right now, the test of a successful launch for Apple comes down to the basics: As Krazit points out, the product just has to work. Everything else is gravy.

[john55440]

For Apple shareholders, the most important part of the announcement is whether Steve Jobs does/doesn't look healthy.

[b_baggins]

First rule of thumb is to sell short like crazy the day before the announcement. Whatever Jobs announces, it will be treated with great disappointment by Wall Street and the stock price will drop a few percentage points. You can make a killing.

[goobimama]

I hate it when we know so much about an event. Back in the days no one knew what was coming and everyone was excited. Now its nearly certain as to what comes out the hall. I blame it on the invitation card. :(

Milind
smokingapples.com

[jscott418]

I have noticed that these product introductions have become underwhelming. Sure Mac Fans will always enjoy a good Steve Jobs product intro. But me, I am just going to wait for the product to stabilize before I consider it. I am starting to see a pattern of hardware and software problems at Apple. Things are just not going as smooth as one thinks they should. I am hoping Apple is making strides. But I think I will give it time. Considering the cost I want to be sure the product does not turn into a paper weight.

[joetesta70]

I agree. Apple appears unable to scale its business like Google or Microsoft

[tealpix]

If the bar is going up--if the products & brand are good, why is the stock going down?

[make_or_break]

Because it's not always all about the products. It's about performance expectations.

There IS still the context that the products are to be served in. Apple's profits and sales continue to do well by the numbers, but expectations are that Tuesday's announcements will bring refreshes, not complete redefinitions, and that doesn't bode nearly as well when consumer money is tight. Investors throw money into a company when they think that it will continue with ever expanding growth. Can a freshened nano and Touch (as expected) really contribute to that? Frankly, just how many iPods does a person really need, especially in a global economy where so many of the major markets is in a down cycle? Especially Apple's home (and prime) market...

Unless the next nano and Touch almost totally redefine and remake themselves (which no one is expecting, apparently), all they're mostly going to do is cater to new buyers and more of those who already have perfectly working units will more than likely skip this model cycle, much like I did with Apple's last one because again, do you really need another one, especially when you need to fill the tank up again?

[canberra_photographer]

Uncertainty over the health of Steve Jobs. Critics and supporters agree that he is the brains of the company and it's future would be uncertain without him.

[b_baggins]

The stock isn't going down. It dips after each announcement than climbs back up again. In fact, smart investors sell short just before a major Apple announcement.

[drbob66]

It's a good company, and they make great products...but the stock is going down because we are in a bear market, and AAPL is currently selling for >29 times current earnings. No matter how cool the products are, this market has little appetite for this high of a multiple for any stock. In fact, I wouldn't be surprised to see multiple contractions for the big-cap tech stocks (AAPL, GOOG, RIMM) within the next six months. Look for AAPL at 110 in the not too distant future. Seems low, but that's still 18x the avg. FY2009 earnings estimate. I don't own any at the moment, but I'll buy some if it gets close to 100.

[eggsngrits]

Apple has such a halo. Their problems are as serious as everyone else's, yet they aren't hurt as much in the market. I simply don't get it.

[DarkHawke]

When you have the press on your side, adding positive spins to "objective" news stories and justifying or minimizing failures, it's really hard to get dinged but so badly in the general public's opinion. Unless you REALLY screw up. Ask any Democrat politician.

[b_baggins]

Apple has gotten hammered pretty hard about the iPhone and the MobileMe launch, but the fact is, Apple has far fewer problems than everyone else. Most of Apple's "problems" are simply disagreements with their product design decisions (no FM tuner in iPods, no user replaceable battery in the MacBook Air, etc.).

[techslut]

It's not a halo, my friend. It's. A. Cult.

[jameskatt]

The stock of Apple always goes down after an Apple event.
This is because pundits talk down the stock to make a profit from buying the stock at a lower price. It is a form of stock manipulation.

I take the stock price decrease as a fantastic buying opportunity. Apple's stock price has never disappointed me when looking at it this way. In fact, I have made a ton of money by doing so.

Therefore, I look forward for the next time Apple's stock tanks. I salivate over this. Yeah! Go Apple!

[kwhsy82]

I don't care if there is a cuter nano or the like. I own IPods, like them, etc.. It just doesn't seem that significant to me at this point. What I care is about if they do anything with MacBooks, etc.. If they start selling those for say $799; if they have something interesting (all with SSD drives?); etc..

Apple "owns" the portable music device (and deserve credit for same). How about increasing their share in the "PC" business beyond the tiny 6% (yes, I know it's growing) but actually get up into double digits? How about pricing their devices so say they are in the price range of say a lot more college students? To put it another way, you can buy totally functional dell laptops for significantly south of $1000. Come on, Apple, make that an option for those who admire your computers.

[i_made_this]

I'm with kwhsy82's post 110%. Who cares about iPods at this point? Apple owns the market niche, game over, next... .

Let's back to what Apple's next moves will be with their excellent pieces of art known as laptops and desktops, which - but for the art factor - remain priced at double the market for the exact same hardware from other OEM's. Art and quality build aside, there's only one major difference - OS X versus Windows. And OS X simply is not worth twice the system price as a Windows box with equal quality hardware.

Apple must bring their laptops and desktops into line with market if the firm wishes to remain competitive in these post-Intel days. Their computers remain not configurable to speak of, and perhaps this is an area where they might regain excitement without having to pay multi-millions in advertising to push bthe product out to market.