I’m sure he won’t mind be referred to as the “other” Joe, since he’s so extremely well known in the industry. I’m speaking about Dr. Joe Webb, and I want to share this tidbit from some of his recent commentary in WhatTheyThink.
“Speaking of living beings, the Pew Internet Survey reported a near doubling of U.S. tablet computer owners in about a 4-6 week period: “The share of adults in the United States who own tablet computers nearly doubled from 10% to 19% between mid-December and early January and the same surge in growth also applied to e-book readers, which also jumped from 10% to 19% over the same time period.” Pew also stated that 36% of households earning more than $75,000 now have tablet computers, and almost one-third of those with college educations had them. There was a big leap in ownership for consumers under 50 years old. ”
According to an analyst interviewed on Bloomberg, Apple’s profits in calendar Q4-2011 were $13.1 billion, which exceeded average analyst projections by 36%, and revenue beat their forecasts by $7.3 billion, with sales in the quarter of $46 billion. Great, Apple had an excellent quarter, and there’s good reason why the stock broke the $500/share level. Except that’s not the interesting story.
Apple is in the S&P 500 index, which had a gain in profits for calendar Q4-2011 of +4.4%. But if you drop Apple out of the calculation, the remaining “S&P 499” shows a decline of -4.2%. Now that’s a story. So Apple’s $13 billion in profits, more than 25% of its revenues, is distorting the rest of the stock market. The disparity in performance is so large that investors are worried about diversification in exchange traded funds (ETFs); Apple’s value now represents 16% of the value of the NASDAQ 100 index.”
What I find of interest — and what Joe calls to our attention — is that Apple is the 800# gorilla of the digital and financial world. And this commentary was written nearly a month ago — prior to Apple announcing what they were going to do with the $100 billion in cash they were sitting on and before the introduction of the iPad3.