Apple Shares Fall More Than 6 Percent on iPhone Numbers

There are some things in life one is bound to learn unless they choose to foolishly ignore them:

1) There really are two sides to every story. Sometimes more. (This is especially the case in politics)

2) Anyone who says all truth is relative needs to be asked if they truly believe that

3) The older you get, the more you appreciate patience, despite, ironically, your years flying by at a seemingly faster pace

4) You can’t humiliate a truly humble person

5) While the press likes to write about doom and gloom, they rarely write follow-up articles on how wrong their earlier doom and gloom articles were

6) Beauty really is only skin deep

7) Statistics can often be made to say what one wants

8) There’s always someone smarter than you, so honesty really is the best policy

Okay. Some of those have little or nothing to do with the point of this blog entry, but I just had to get them out anyhow.

In all the hype that was the release of the iPhone, passions flared. From the folks claiming it would be the most revolutionary mobile device since who-knows-what, to the folks pointing out how it’s a Ferrari with Honda Civic engine. We are now approaching the one-month-since-release mark and the smoke may finally be starting to clear.

According to this AP (tech) piece on the Yahoo! News site, the share value of Apple stock fell more than 6 percent or $7 billion of market value yesterday because of fewer people than expected signing up for iPhone service. That’s no small chunk of change. The fact that the Apple spokesperson, someone I’m sure is paid a hefty salary to always have a quick response, “did not immediately return a call for comment” yesterday pretty much confirms this for me. AT&T, the iPhone’s exclusive carrier for the next four plus years, said they only activated 146,000 iPhones on June 29th and 30th. Personally, I think this could be either because there was just as much hype as some of us suspected, or because AT&T couldn’t handle the demand. But you know what? Either choice isn’t good. It may even be a case of both.

No one can deny the hype. I recall some pro-Apple podcasters pretty much drooling over all the press. Even in the AP piece Ingrid Ebeling, analyst with JPM Securities is quoted as saying, “It’s just had such a run on overexpectations, I don’t see this as any sort of disappointing metric in terms of the iPhone overall.” I admire her professionalism in avoiding criticizing the product as she should, but I admired even more her refreshingly honest sentence after that, “I think it’s just gotten a little overhyped over the past month [emphasis mine].” As do a lot of us Ms. Ebeling.

Like some of you, I wondered how on earth Apple could lock itself into a 5 year deal with anyone, but when I found out it was AT&T I was a bit gobsmacked. Gobsmacked because the majority of what I heard about AT&T wireless service was bad. Worse, because the folks who told me this were former AT&T customers. It’s hard to argue with experience.

All things considered, the drop in share price shouldn’t come as a surprise to anyone. It was simply a matter of time. Besides, as the old adage goes, the market has a way of correcting itself. This seems to be such a case.

Nevertheless, I don’t for one second believe this is a problem for Apple, the company. Yes, there are lessons to be learned. One of those lessons may be: just because you know how to sell computers doesn’t mean you know how to sell mobile phones. But something else is on the horizon that should pull the company from Cupertino out of the doldrums. It’s bright, it’s shiny, it’s sharp, and I believe it will actually bring that $7 billion back, and maybe a bit more. It‘s scheduled to arrive in October. What it am I referring to? It would be Leopard.

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