The outrageous views from all sides are frustrating.
1. As fond as I am of the company, Apple has to take the lion's share of the blame for today's events. I would not expect Apple to respond to the Gizmodo rumor, but as I posted at the time (
Link), Apple should have done more to head off misinterpretation when they made the MacWorld announcements. A little better effort to communicate on Apple's part could have avoided the initial 6% drop in stock value, as well as all the subsequent fud which has kept the stock down, and encouraged speculation.
2. Apple stock fell nearly $3 within minutes of Gizmodo's rumor. Given that there are something like 890 million shares outstanding, that's well over 2.5 billion dollars of value. Thus, I do hope that the SEC looks into this rumor just as it looked into the false report of Steve Jobs' heart attack in early October. I suspect that they will find a lone teenager here as well, but investigating rumors that cost billions is part of the SEC's job.
To be fair, I don't think it would be unreasonable for the SEC to investigate Steve Jobs' health as well. There are investors who are worried that Apple is not being honest (I'm not among them), and you can bet that some of them have contacted the SEC. With a company as large as Apple it's reasonable that the SEC should be paying attention. The SEC can't babysit every little detail of the marketplace, but it has an important role to play in keeping the market as fair and transparent as possible. It has done a poor job on many fronts over the last decade, and that's part of the reason for the current economic crisis.
3. Gizmodo is no worse or better than most blog sites. But context and tone and other issues are relevant. Gizmodo put this story with a large picture on the front page of their site. The author twice calls attention to the previous reliability of the source. Given the obvious importance of the issue, and the numerous reasons to doubt this rumor (like the fact that Jim Goldman and other mainstream media and analysts have denied that Jobs is ill, and that Apple spokespeople have denied the relevance of Jobs' health to the MacWorld announcements), I think Gizmodo was irresponsible.
4. The drop in stock value turned this rumor into a legitimate news story that merits publication and discussion on Appleinsider, the LA Times, and elsewhere. But moreover, Appleinsider is a different type of site than Gizmodo. The context and tone of Appleinsider generally make it obvious that you should not put too much faith in the rumors. Rumors on Appleinsider do likely contribute to stock trends, but they've never caused a noticeable movement in share value. Maybe that's just luck, or a sign of irrelevance, but it's an important distinction. That's not to say that Appleinsider has a spotless reputation. I've been disappointed with certain articles that have seemed inappropriate for one reason or another, but on the whole I think Appleinsider avoids the type of mistake Gizmodo made. Indeed, AppleInsider's coverage of this rumor which includes a brief history of Jobs' health plus links is quite admirable.
5. The internet is still a wild new territory. The rules for appropriate behavior haven't yet been worked out. This is partially why a rumor like this one merits discussion, and partially why the SEC should be investigating. Everyone on the internet should be conscious of what they're saying and it's effect, and there should be repercussions for egregious offenses. I'm not suggesting that Gizmodo needs to be punished, but I think it would be appropriate if they felt like their reputation has taken a hit from a broader community who disapproves of their behavior.
6. All the speculation about Jobs' health and impending retirement is disgusting. There's no good evidence of either. All signs suggest that he's doing what he loves; Mick Jagger will lead the Stones until he collapses in a heap on the stage, and Jobs will pursue innovative technology until he can't lift his iPhone. And fortunately, in accord with all responsible reports, that's not likely to happen for many years.
7. Apple stock is a phenomenal buy. In contrast to wizard69's pessimism, Apple is firing on all cylinders and it's future looks brighter than ever:
a) Mac sales have been increasing 20-30% per year for the last three years. That's not going to stop. Moreover, Apple is beginning to dominate higher education. As many observers have noted, these young converts will be a fountain of repeat buisness for years to come, and some of them will even bring Apple preferences to the enterprise. It's likely that the current quarter will show a bit of a pause in Mac momentum because of the economy and the fact that so many people are waiting on product refreshes - new Mini, new iMac, and new 17" Macbook Pro. A completely redesigned Mini could be a huge hit.
b) No technology segment is growing faster than smart phones, and Apple has the single most desireable phone on the market. Even if Apple only manages 20% of all smart phones over the next five years, they stand to earn more money off phones than they do off Macs. The iPhone has already generated billions in revenue much of which is not accounted for in aapl's PE. For more details read Andy Zaky's excellent article here on AppleInsider.
Link
c) The iPod Touch is creating a whole new market for Apple as a gaming platform/portable computer for a new generation. I could see this coming after my first visit to the app store last summer, but reports all year long have confirmed it. The app store is an astounding success, and once all the kids who received these things for Christmas show them to their friends, we'll realize that the explosion has only begun. The games aren't as complex or readily controllable as those on the DS and the PSP, but for versatility, excitement, affordability and sheer coolness, nothing touches the Touch.
d) Apple has a lead in software and hardware that no one can easily replicate. OS X is an 800 pound gorilla at the center of everything Apple does. Despite the complaints that Apple's current quality does not live up to the mythical perfection of old, Leopard is an extraordinary foundation for growth, and the fact that Apple can work on it to power all their platforms provides a type of economy of scale that no one else can match. In hardware, the iPhone and the Touch are far ahead of the competition, and there's no doubt that Apple intends to keep this lead. We have yet to see the fruits of the PA Semi acquisition.
e) Eventually we will see a tablet or ProTouch or something similar. Apple has the pieces in place, and there's every reason to believe that it could be a huge success.
f) The AppleTV is not dead. It's a product of the future. I've posted on it before, where my main point is that in conjunction with the iPhone/Touch as a remote the AppleTV will eventually come into its own.
Link As it is, Apple distributes more paid programming over the iTunes store than any competitor, and discs are a slowly dying technology.
g) What stock would you add to the Dow once you pull a couple carmakers?
A major Apple event would suffice to quell the shareholders from bailing and taking the stock down to the teens once more though.
