Media Miss Key Question on Apple Earnings

NEW YORK ( TheStreet) -- The media's takeaway from Apple's ( AAPL) earnings is insufficient, too simplistic by half.

Bloomberg and many others said this (or something close to it) in their headlines:

"Apple Stock Drops On Missed Estimates After iPhone Lull."

The sentiment -- that iPhone sales unexpectedly skipped a beat as consumers awaited the presumed fall release of the iPhone 5 -- doesn't say all it should.

After all, in the lead-up to Tuesday's earnings report, all analysts were talking about was consumers holding off on their iPhone purchases. Obviously, this phenomenon was far more severe than anyone expected. But why? That should be the real takeaway.

  1. The competition has faster product cycles, exploiting the considerable gaps in Apple's product cycle. Apple will need to adjust, or face more disappointing quarters.
  2. With the anticipated big advance between the iPhone 4S and iPhone 5, more consumers than anticipated held off. Consumers are realizing that Apple has incremental advances and significant advances. They are waiting for the latter.
  3. The iPhone might be losing a bit of its singular standing to Samsung (particularly in China) and Google (GOOG).
  4. The economy is cratering. Consumers seemed willing to spend their last penny on Apple products. Now too many don't have that last penny.

There are no clear-cut answers here, at least not yet. But the question traders need to be asking is one the media are not: Why did the iPhone perform even worse than everyone expected?
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

Fuchs appreciates your feedback; click here to send him an email.

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