Apple's fiscal Q1, which covers the holiday shopping season, will have to do more than meet expectations. It must produce the record numbers we saw from the company earlier this year. Anything short of that will trigger disappointment. After Tuesday's afterhours swoon, AAPL remains priced to perfection. Investors should take profits if they can immediately, or take them on a bounce, and absolutely not hang around too long at levels above $600, assuming the stock gets there again. They should also shy away from arguments based on valuation. Valuation means little, if anything, with relation to Apple. The product pipeline matters. That includes more than iPhone 5. It includes the mini iPad and iTV, a product Tim Cook clearly does not know like Steve Jobs. And maybe even more importantly, the product pipeline includes how Apple organizes and markets a launch. Jobs told his marketing staff: "You worry about the back covers. I'll worry about the front covers." Now with Jobs gone, there is nobody to say "no" to bad designand there is nobody left to adequately take care of "front cover" marketing.
A Tall Order for Cook
For the first time in his tenure as Apple CEO, Tim Cook faces a situation where he must actually run the company. This isn't about visiting China, dictating peppy memos, matching charitable donations or organizing a supply chain. This is about what Steve Jobs brought to Apple's core: innovation and marketing. First, Cook has to manage to beat his own depressed Q4 guidance. Here's hoping he did something Jobs taught him and guided way too low. Second, and most importantly, he has to deliver new products to the public that sell as well as, if not better than, all of the products that came before them. Given how perfect Cook has to be, I would not want to be in this stock for anything more than a swing trade going forward. If this quarter's miss simply tells us that "Apple is human" -- another line I heard from Apple apologists in the post-earnings media crush -- longs really do need to start attending to the elephant in the room. Follow @RoccoPendolaAt the time of publication, the author was long INTC and MSFT. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.