Apple sets new records, Wall Street loses faith

"When I get to the bottom I go back to the top of the slide, Where I stop and I turn and I go for a ride, Till I get to the bottom and I see you again." The Beatles, Helter Skelter

Morrisey got it right, of course, when he sang: "We hate it when our friends become successful," and that's certainly the case when it comes to market reaction to Apple [AAPL] and its record first quarter. You see, while the company says the only way is up, gloom-laden analysts can't see any way but down.

Apple's fall

Sure, you can discuss increased competition in the smartphone space as Samsung tithes its profits to offer carriers good deals for its devices, which means the Korean firm needs to sell many more systems than Cupertino in order to make the same cash.

Me? I can recall when a corporation with interests in the arms industry would be boycotted by the smart consumer, but times have changed, and not in the Bob Dylan sense. The answer may once have blown in the wind, but too many people chose to ignore it.

Some are discussing Apple's depressed Mac sales. Apple CEO, Tim Cook tried to address this when he noted that the company's most popular desktop, the iMac, wasn't available for very long during the quarter. In its announcement, Apple also took pains to stress that year-on-year this Q1 was one week shorter than the 14-week period last year, which many may think would make its record results even more impressive -- not in this new reality.

A new reality.

Reading Apple's announcement release last night I could tell the company knows it's sailing into stormy waters. The announcement had just a little too much emotion buried between its lines. It mentioned the difference in the length of the quarters, it threw a positive spin, but something inside seemed hurt, cold, angry.

Cupertino is upset. It's annoyed with the competition (who it still believes ripped-off its ideas, an opinion I share but many don't); it's upset with the analysts; it's distressed at the lack of faith being shown by investors on strength of a simple leadership change; it's infuriated that it can't yet shake off the 'Steve Jobs is the Messiah' myth.

This new Apple knows that somebody, somewhere, clicked a pair of red high heels and the company really isn't in Kansas any more -- it never was, it's in California, but anyone used to TV schedules will know exactly where I'm coming from.

Times have changed

Despite its ship sailing stormy seas, Cook took pains to defray some of the company's critics. He tried, but unfortunately every word that emerges from inside Cupertino is pored over, inverted, prodded and assessed by millions, so it's inevitable his statements will be used to prove…to prove…what? In this case they seem to prove that in a universe defined by speculation, observers will always find what they seek.

You see, Apple has become a projection -- or, to be more accurate, it has become a place people can't help but project their own speculated realities upon. Things are grim at the moment, and so Apple's story looks grim.

Why?

Because analysts while saying they are attempting not to act emotionally over Apple stock (and I'm looking at you, Jim Cramer) are, in fact -- and inevitably given the complex highways and byways of human behaviour -- acting with extreme emotion.

Take a look outside the Apple-verse and see where we're at. The fiscal constellations are adrift; the starlight of consensus imagination which once steered the good ship of market forces across the ocean of human achievement and ingenuity are lost fron view as we sail a Sargasso sea of recession. And Apple's revenues in its last quarter exceeded those of Google across its entire financial year.

Is California dreaming?

What does this mean?

Put simply, it means the sell-off on Apple stock is nothing more than an inversion of some giant wish-fulfilment/fantasy in which analysts, investors, the entire stock market, bankers and people with power everywhere aren't just investing in profits and results, but desperately seeking a new dream.

All this conversation claiming Apple hasn't filled them with any confidence of it having another breakthrough product waiting in the wings is nothing to do with the fear they're really feeling: which is that they know that if someone, somewhere, doesn't invent a new mass market consumer product, then the global economy will continue to contract.

They seek leadership, but Apple's in between product cycles and swims the same seas.

The Steve Jobs myth was that this Christ-like, Whole Earth-reading Uber-hippy had the capacity to invent (or reinvent) whole new industries: the PC, the MP3 player, the phone. Many invested in that myth, because it's a myth they need.

With Steve out the picture, investors have nowhere to turn. You see Jeff Bezos coming up as another veritable saviour, but at the end of the day that firm's just a retailer and Bezos? He's just a shopkeeper.

The fiscal salvation these people pray for won't be found by slavish devotion to a retail brand, but by correctly identifying where it is the next shimmering flame of humanity's triumph over nature is coming from -- if you feel products which revolutionized multiple industries and ushered in whole new creative heights are worthy of being seen as that.

Correctional facility

The "correction" that's taking place on Apple stock is ugly, painful and I'm certain some people are going to lose some money. None of this is deterring the company from its main ambition, as Cook remarked last night. The company remains "laser-focused" on "developing the best products in the world".

Apple's never really cared too much about the stock market. The firm has seen its shares head toward de-listing in the past.

The company is run by its people, not its fans, not its investors and not the analysts and while I'm sure we're going to see senior management's precious time wasted by something akin to a shareholder rebellion later this year, I don't think it will divert its leadership's attention from its stated mission and commitment to product design.

It's possible as the age of connected television migrates from promise to reality and as Apple begins to explore the edges of home automation and wearable computing we'll see some new excitements soon from inside Cupertino.

Meanwhile the company is having one last laugh as it engages in its $10 billion stock buyback -- because, shocking as the new values may be to investors, it's good news for Peter Oppenheimer's people as it claws back just a little more independence -- it's getting more bang for its bucks.

While you panic, it might be worth pondering just what kind of thermonuclear business an imaginative firm equipped with $137 billion in cash and investments can explore in a patent-driven mobile devices age? After all, that's more actual cash in hand than most banks are worth.

This is just a chapter in Apple's story.

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