Alex Halliday

The people at Apple must have been pleased as punch when the annual Keynote presentation became the highly anticipated media circus that it now is. Gone are the days of Mac customers slowly hearing about new products as they trickle through from the early adopters to their friends and family and beyond. Now, every year in January, every mac enthusiast tunes into MacRumours.com or impatiently refreshes the Apple.com homepage awaiting ‘the next big thing’. 2007 started with a bang for Apple with the launch of a truly revolutionary product that has been the main catalyst for growth for an extraordinary year which saw Apple’s share price surge and the iPhone gain a sizable chunk of the handheld market.

Followers will always be loyal to Apple as they have bought into the brand, lifestyle and personality of the Anti-Microsoft. But Wallstreet has no such loyalty. They look at markets, growth and potential . This could be why during Steve Job’s 90 minute presentation, Apple’s shareprice dropped by about $20bn or 11%. The MacBook Air represents an interesting product. But it is by no means revolutionary. The message is clear, the market is disappointed.

Personally I would have trouble buying a laptop that didn’t have an optical drive. I may be able to use TimeMachine and capsule, iTunes and remote drives to run my life but I just don’t want to. I know people who have not eaten for a month just to buy an iPhone but i don’t think anybody will be skipping dinner anytime soon to buy the Air.

Michael Raynor has an interesting book called The Strategy Paradox which talks in depth about the striking similiary between the strategies of companies (or products) that are wildly successful and those which are massive failures. Apple has a long history of placing huge amounts effort into big ‘hit’ products. This has paid off with launches such as the iPod and the iPhone. But it has also had Newton, Pipon, Lisa and Newton products which where really quite spectacular failures. I doubt the MacBook air will be a Lisaesque failure but it certainly isn’t an iPhone either.

I would say that the market’s valuation of Apple was based on an assumption that it would be able to continue to maintain iPhone standard launches year on year. Anyway, good luck to Apple for 2008. I’m sure they will continue to do amazingly well with their suite of products and I will be interested to see how the iPhone grows and develops, especially with the upcoming release of their SDK.

Final thought: now might be a good time to buy Apple stock. The huge 11% write down means disappointment from Wall Street but there are still another 11 months in the year. If the iPhone follows the iPods history of mutation and development it could be a very interesting year for its mobile market share. Just because they choose not to launch everything at the keynote, doesn’t meant the rest year