Rumors of Apple’s Doom May Prove Premature

If Steve Jobs were still alive, he’d probably be irate.

Is Apple in trouble?

The company’s stock price is plunging, a new report in The Wall Street Journal suggests that components orders for the iPhone 5 have been cut, analysts seem a mite pessimistic about the next earnings report, and—oh yeah—rival Samsung just announced that its Galaxy S smartphones have sold more than 100 million units worldwide.

That would be more than enough to send Apple CEO Tim Cook reaching for the antacids. But not so fast: despite a wave of bad news—and rumors of bad news—smacking his company around, there is some data that contradicts the doom-and-gloom scenarios: according to estimates by research firm Gartner, Apple’s share of U.S. PC shipments was up 5.4 percent in the fourth quarter of 2012, even as the overall PC market skidded down 2.1 percent. (Some other firms, most notably Hewlett-Packard and Dell, also enjoyed gains despite the overall industry trend.)

But right now, it’s rumors about Apple’s performance in the mobility market—as highlighted by that cut in orders for iPhone 5 components—that seems to have Wall Street spooked and pundits chattering. While a cut in orders could be a sign that the company faces slackening demand for its flagship smartphone, basing predictions of Apple’s doom on that single data-point may be premature. For one thing, it’s a rumor—and if Apple’s demonstrated anything over the past few decades, it’s that the rumors about its financial health fly fast and unfounded.

Second, the rumor—even if true—provides precious little context for a cut. Apple may have reduced its orders in anticipation of sales leveling off in the wake of a busy holiday season. That’s simply real-world planning, not a sign that iPhone sales have tumbled off the proverbial cliff.

Or Apple could really be facing a slowdown in demand for its products, in which case the company may need to adjust its strategy to meet a new reality. Rumors of new devices, including an “iPhone Mini,” have circulated in recent weeks. It may take a game-changing piece of hardware for Apple to regain some of the market luster it seems to have lost.

 

Image: Denys Prykhodov/Shutterstock.com

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