Apple is getting creamed today because the Wall Street Journal reported that the company recently cut orders for components. Shares are down more than $18 (3.65%) today to $502 from $520. They were $550 just days ago, and nearly $700 last fall. Speculation is that demand for the iPhone 5 has been weakening and that Apple is losing ground to Samsung.
Is that the case? We'll find out in just nine days - next Wednesday, Jan. 23, when Apple reports its results for the holiday quarter.
Until then we'll mostly be treated to the usual back and forth over Apple, with its many fanblogger "spinions" bending themselves into pretzels to argue that Apple is doing just fine, thank you, and whatever negative news you might be hearing is all just FUD invented by short-sellers or someone else with an axe to grind and why would you get your news from the Wall Street Journal when you could get it instead from a laughably biased pro-Apple blogger? Like this.
Apple Needs A Blowout
Fanbloggers were looking for a big holiday quarter, and it's hard to imagine Apple not delivering. If there's any weakness at all, even the tiniest bit, I'd expect Apple to get crushed. We've all grown so accustomed to seeing Apple blow out even the most bullish expectations that even the tiniest crack in the facade can be worrisome.
That said, demand for the iPad Mini seems strong, and Apple today is what IBM used to be when people would say that "nobody ever got fired for buying IBM."
In smartphones and tablets, Apple is the safe choice. It's the one you recommend to your mom or your friend who doesn't have a clue about technology. And there are lots of those people.
Apparently, however, there are also lots of people who dare to take the huge risk of using an Android phone, most notably the Samsung Galaxy S3. Samsung claims to have sold 40 million of the S3 model and 100 million of all its Galaxy S models combined.
The Deeper Problem
There was a time when Apple clearly had a better product in mobile. That time is over. And people are figuring this out. I use the GS3 as my daily phone and I'm incredibly impressed by it. To my mind Android has simply surpassed Apple in every way that matters. Others might disagree. Wherever you stand, you must admit that the two platforms are roughly on par. Both are fast, smooth and reliable. Both have loads of apps. Both will do whatever you want to do with your phone.
Also: Apple now has 15% market share worldwide in smartphones, and Android has 75%. I don't think anyone, not even the most rabid Apple fanblogger, expects Apple will ever have significantly more share than it has today. Meanwhile Android is chipping away at Apple's share in tablets as well.
Apple still grabs most of the profit in the mobile space. But this too will come under pressure as more and better competition enters the space. Apple is a magical place, but not magical enough to defy the law of gravity.
UPDATE: A former Microsoft exec writes to tell me: "Deja vu all over again. 2013 is the year Google really pulls ahead. The product gap has been narrowed to where it's debatable which is better. A la Windows 95. 2013 will be critical for Apple to show it's not Windows 95 redux."
Image courtesy of Reuters.