Edible Apple

Apple will announce its Q4 earnings this Tuesday, and like usual, even if Apple blows past all estimates, the stock will likely tank if its guidance for the next quarter isn’t up to par with what analysts are expecting.  AppleInsider is reporting that one of the key pieces of information analysts will be paying attention to is how many retail stores Apple is planning on opening up in the coming year.

Apple has lost over 50% of its value over the past few weeks, mostly due to surrounding economic conditions, and not due to any intrinsic factors over at Apple.  As Apple continues to set new earnings records quarter after quarter, and with a slew of new products on the market as the Christmas shopping season approaches, its amazing that Apple has sunk so low.  Sure, the current economic condition is relevant to Apple’s financial future, but Apple is better positioned than most to weather the storm.  First of all, Apple has significant cash reserves, which means that it doesn’t need to borrow money from banks.  And second, Apple products are thought to be premium products – meaning that if you were in a position to buy a 2500 dollar MacBook Pro in August, you’re likely to be able to buy it today.  The New York Times recently wrote an article detailing how Apple seems to be weathering the current economic crisis better than most.

Analysts, however, do correctly point out that the iPod line from Apple seems to have run its course.  While the days of iPod as king are behind us, Apple has shown itself to be quite adept at introducing new iPods with small but significant upgrades that keep consumers coming back for newer models.  So while the market for iPods and other mp3 players is indeed saturated, Apple is able to counteract this with new models that consumers are willing to pay for.  But even if iPod sales start to shrink dramatically, analysts, for whatever reason, seem to quickly gloss over the record setting number of Macs Apple is selling each and every quarter.  When it comes to profit margins, the Mac is Apple’s MVP, yet analysts like to focus on the impending decline of the iPod.  Moreover, with the iPhone selling even better than expected, there seems to be no shortage of promising news coming out of Cupertino.  But if history is any indication, don’t expect the analysts to fully understand what’s going on.

In any event, earnings season is upon us, and Apple will be releasing its earnings this Tuesday.  Below is a chart from CNN detailing all of the analysts predictions.