I am starting to become more and more convinced that talking up Apple’s (AAPL) share price is as fashionable as the design of their products. I keep seeing headlines like ‘Profit at Apple up massive 50%’ which is somewhat irresponsible reporting, to put it mildly.
The main part of the uplift is actually down to nothing more than their adoption of a new accounting standard called FASB. To summarise in simplistic terms, Apple was treating sales as ‘subscription’ revenue which was accounted for over 2 years from the time of sale. Now Apple books all the revenue immediately, so you will understand how this has boosted their revenue figures.
iPhone sales at 8.7million actually missed forecasts of 9 million.
Overall iPod unit sales were down a smidgen, but a higher percentage were the iPod Touch so they made more money.
Goldman Sachs have a price target of $230 for Apple … there are many other companies with more upside that are not becoming the victim of huge expectations. I’d prefer to invest in one of those.
What will be interesting to see is what Steve Jobs decides to do with the $39billion in cash and securities the company has now stockpiled!