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Apple reports quarterly earnings on Wednesday. Will they be strong enough to halt a stock price slide that began last year?
There's so much fretting around Apple right now that analysts, commenters, and Apple-ologists are calling today's quarterly financial results that'll hit after the markets close the mother of all earnings reports (Forbes is explicitly calling it that).
Why the high anxiety about the world's most valuable publicly traded company — and the most valuable California company by a substantial margin (Apple: $418 billion market cap; number two Google: $254 billion)? Simple: Analysts suspect that Apple's epic comeback story, from near bankruptcy to a mature company that's printing money with its monumental profit margins, is over. Nothing gold can stay, to borrow a line from a rustic American poet who never would have dreamed of an Age of iPhones but who would probably have been retroactively credited by Apple for his efforts to "Think different."
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Customers test the IPad. Apple devices may soon be able to recognize these fingers by their fingerprints.
Apple has a huge hoard of cash: $117 billion at last count. It's going to pay out a dividend to share some of the wealth with stockholders, but it's also going to make acquisitions. Except that Apple doesn't really have a long track record of making acquisitions. It's been content to innovate and grow on its own, rather than to go out shopping for innovation and growth.
But the announcement today that it will buy AuthenTec, a company that's focused on making mobile devices more secure, for $356 million should please Apple's investors and fans — as well as future customers. AuthenTec has developed a fingerprint-recognition technology that sounds like it maps perfectly to the touchscreen age. You use your fingers to manage the interface on iPhones and iPads, so it why shouldn't Apple's mobile security protocols be finger(print) based, as well?
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A Blackberry Bold is displayed at the 2009 International Consumer Electronics Show at the Las Vegas Convention Center January 8, 2009 in Las Vegas, Nevada.
Business Insider is engaged in plenty of speculation about struggling BlackBerry maker Research in Motion today, after the company disappointed Wall Street with its fiscal fourth quarter results yesterday. Part of that speculation involved interpreting RIM's CEO's comments about "strategic opportunities" as "let's look for someone to buy us." At the New York Times, Michael J. De La Merced joins that chorus.
Here's a Jay Yarow at BI, on why no one in his right mind would want to buy RIM (it's in Q&A form):
...Is anyone a good fit for RIM?
Honestly, we don't think so. This is a company that is dying and in a state of transition. It runs on its own platform. Most hardware makers have picked their partners for software. Transitioning to RIM's software doesn't make sense unless RIM's next software is awesome. In which case, another hardware maker like Dell or LG could buy RIM and use BlackBerry 10.
But, that's sort of silly for RIM, right? They wouldn't want to sell if the software is good.
Exactly. What's the point? RIM could turn itself around without help.
But that's pretty unlikely, right?
So that's it for RIM? Make great software or die?
Pretty much. It's possible someone wild card jumps in. Maybe a carrier takes a chance on RIM if it gets cheap enough, or maybe a Chinese phone maker buys the company to get a nice entry into North America, or maybe a PE firm looks at RIM's still impressive cash flow and decides to take the company out and try to fix it.
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A Blackberry Bold with the new Slacker personalized radio application is displayed at the 2009 International Consumer Electronics Show at the Las Vegas Convention Center January 8, 2009 in Las Vegas, Nevada.
I've been advocating, to pretty much anyone who will listen, that Apple should buy Research in Motion, the Canadian company that makes the BlackBerry smartphone and has seen its stock price completely collapse in the past few years, falling more than 70 percent. Apple, mean while, has gone from around $350 per share per-holiday last year to more than $600 this week.
Apple's success has yielded a cash hoard of $100 billion, some of which Cupertino is dealing with through a dividend and stock-buyback plan. But there's still tons of money left over. I say, Why not buy RIM? At a market cap of $7.25 billion, Apple could pick up the dominant player in the business-and-government smartphone market and plug the one gaping hole in its dominance of consumer electronics.
Apple could do this, possibly using cash that it's keeping outside the U.S. (RIM is Canadian! Apple wouldn't have to re-patriate the money!), and still have enough left over to buy, you know, the Eiffel Tower or something...
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A member of the media examines the Samsung Electronics Co. Galaxy Nexus smartphone, running Google Inc.'s Ice Cream Sandwich Android operating, system in Hong Kong, China, on Wednesday, Oct. 19, 2011. Samsung will begin selling the first mobile phone run on Google's new operating system next month, counting on facial-recognition security to help challenge Apple Inc.'s iPhone.
At Slate, Matt Yglesias rolls out a chart that shows the astonishing adoption rates of both Apple's iOS and Google's Android. So yes, both mobile operating systems have done more than caught on — they've taken over the world.
The developed world, that is. And this is where I think Yglesias overreaches:
In terms of adoption rates, iOS blew the previous entrants out of the water and now Android is setting a new even more amazing record-breaking pace. This is going to be an especially important development in relatively poor countries while mobile connectivity is generally better than wireline, so the availability of relatively cheap relatively powerful mobile devices is a total gamechanger.
He's making the healthy assumption that these operating systems are going to be adopted in the developing world. iOS runs on only Apple devices — and Apple devices are very expensive, even by developed-world standards.