It's good to be the king. I am willing to bet that if F5 (Nasdaq:FFIV), Google (Nasdaq:GOOG), or EMC (NYSE:EMC) misses its revenue estimate by 5%, the stock is going to get pounded pretty hard. With Apple (Nasdaq:AAPL), though, it seems like analysts, investors, and commentators are willing to go out of their way to find excuses and explanations to soften the blow. This is not to say that Apple does not deserve the benefit of the doubt (it does), but it just highlights that this is a situation where there is a huge fan base that wants the company and its stock to succeed.

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A Disappointing Close to the Fiscal Year
It is a testament to the success of Apple that 39% growth to over $28 billion in quarterly sales is a disappointment. But a disappointment it is all the same, as that top line figure came in about 5% below the average estimate and 10% below the target of the most ardent Apple analyst around.

The prime source of the trouble is the iPhone. No, Motorola Mobility (NYSE:MMI) has not rebounded with a new must-have phone, and nothing has altered the downward spiral to irrelevance of Research In Motion (Nasdaq:RIMM) or Nokia (NYSE:NOK). Instead, the problem is a familiar one with tech followers - a mishandled product transition. With a new iPhone soon to arrive (and now on the shelf), shoppers in the quarter held off on buying a new Apple phone. Consequently shipments were about 15% light of consensus expectations and that shortfall cost about $2 billion in revenue.

With the hiccup in sales came an incremental stumble in margins. Gross margin was up three and a half points from last year, but down more than a point sequentially. Likewise, operating income rose 60% from last year, but slipped about 7% from the fiscal third quarter.

Forget the Phone, What About the Pad?
Although the explanations on the shortfall in the iPhone make sense, the performance of the iPad bears a little discussion. Sales more than doubled from last year, but were up 14% on a sequential basis. That sort of growth is normally fine, but there's nothing normal about Apple. More to the point, Apple has really been the only company to find demand for a tablet PC, but maybe they have started to saturate the market.

Negative as that would be for Apple, it would clearly be a bad sign for companies like Samsung, RIMM and Dell (Nasdaq:DELL) that are still hoping to reap some return on their investment in this category. More to the point, it could lead more companies to go the route of Hewlett Packard (NYSE:HPQ) and just pack it in altogether.

The Apple Enigma
Apple still stands out as an unusual company in so many ways. In a tech world that increasingly values the online, the virtual, the cloud and the software, Apple is arguably strongest in hardware (though that strength is predicated in many cases on excellent underlying software).

Apple is also unusual in that they seem to create large markets that rivals have difficulty penetrating. The iPod was a major step in portable music, but Microsoft (Nasdaq:MSFT), SanDisk (Nasdaq:SNDK) and Samsung couldn't capture the same momentum. At the same time, Apple is arguably the only company really succeeding in tablets and Apple stands out as a relatively rare North American success in PCs. In fact, it's really only in smartphones where Apple has to share, but even there they continue to shape the competitive dynamics.

The Bottom Line
Apple's valuation is not demanding and early reports suggest the new iPhone launch is going well. Moreover, management was rather aggressive concerning December quarter guidance, so it seems imprudent for bears to celebrate this as that long-awaited dam-break in the Apple story. While the cult-like popularity of Apple is a bit of a concern, it is difficult to argue with a company that is so in tune with its customer and so flush with options for new products and services. (For additional reading, see A Primer On Investing In The Tech Industry.)

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Tickers in this Article: AAPL, GOOG, RIMM, NOK, MSFT, HPQ, DELL

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