What Apple did in April 2012
Things were looking good for Apple and its stock in April, Piper Jaffray analyst Gene Munster and Topeka Capital Market's Brian White both began the month with a prediction that “Apple Shares can reach $1,000 within 12 months”. Later in the month Henderson Global Investors analyst Stuart O’Gorman came out with the claim that Apple could hit $1,200 a share. Then there was the suggestion that Apple’s market capitalisation could reach $1 trillion in a few years as we saw Apple's market value surpass $600 billion. It seemed that nothing could stop Apple’s run and high hopes abound. However, mid month Apple’s stock saw a brief, but concerning, five-day decline, following weeks of good news about Apple's stock. It recovered on 18 April.
This was despite news that in April more than 600,000 Macs were reported to have been infected with a Flashback Trojan horse being installed with the help of Java exploits. It rocked the world of Mac users who took pride in telling their PC-loving friends about the malware-free world of Mac. By the end of the month security venders and Apple had made tools available to detect and remove Flashback. Later in the year Apple would reveal new Gatekeeper security measures in OS X Mountain Lion to protect Mac users.
The Flashback ho-ha didn’t seem to affect the confidence of Apple shareholders too much in what analysts described as a “perfect quarter” following Apple's financial results announcement on 25 April. The debut of the latest iPad and continued strong sales for the iPhone and Mac helped Apple nearly double its profit for the fiscal second quarter. The company reported a net profit of $11.6 billion on revenue of $39.2 billion for the quarter ended March 31, 2012.
At the end of the month a report appeared suggesting that Apple could join the Dow Jones elite, although such a move might mean Apple having to split its stock.
Apple was making a ton of money, but it was attracting attention for its tax practices. A New York Times report claimed Apple employs “a handful of employees” at a small office in Reno, Nevada, where the tax rate is zero, to avoid paying California’s 8.84 per cent corporate tax rate. By doing so, “it has avoided millions of dollars in taxes in California and 20 other states”. Apple responded, saying that it is “among the top payers of US income tax” and also that it is among the top creators of American jobs. The company was also accused of ‘tax dodging’ in Britain.
What Apple did in May 2012
May saw the US department of justice go after Apple in an antitrust lawsuit that accused Apple and five large publishers of working together to raise prices of e-books. Apple claimed that the DOJ was siding with monopoly, saying that "the launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry." The case is still ongoing and is expected to be in court in July 2013, if Apple doesn't settle the matter, as they have in Europe.
A month after announcing that it would pay a dividend to shareholders, Apple CEO Tim Cook declined to take his own dividend payout, which would have been worth $75 million. The dividend program was revealed to be one of the biggest ever, representing $9.9 billion in annual dividend payments to shareholders.
At the end of May Apple CEO Tim Cook attended the D10 conference where he spoke about a range of topics from Siri, the future of the Apple TV and his concerns about the lack of skilled workers in the US. His references to television and gaming caught the imaginations of many.
However, Pacific Crest analyst Andy Hargreaves bucked the trend, pouring cold water on rumours of an Apple television, claiming that Apple wouldn't waste the retail space, and that there's little chance of it doing a deal with US broadcast and cable providers.
Also heating up were rumours of the iPhone 5, but as one analyst pointed out around the 14 May, sales of the iPhone 4S were likely to decline as people waited for Apple to launch a new version of the phone. By September it was obvious that this theory was correct.
What Apple did in June 2012
June was the fifth anniversary of the launch of the iPhone in the US. In the five years since the launch of the iPhone in June 2007, Apple has seen $150 billion in revenue thanks to the device, and sold 250 million units worldwide. Asymco analyst Horace Dediu calculated that the iOS app economy is making $4.3 billion per year with 49.5 million apps downloaded every day.
Expectations for the iPhone 5 continued to heat up, with JP Morgan analyst Mark Moskowitz predicting that Apple will see "strong unit sales" in 2013.
However towards the end of June an analyst expressed concern that the next five years may be less lucrative for the company. Strategy Analytics executive director Neil Mawston noted that Apple is at the "top of its game", but added: “There are emerging signs that the iPhone’s next five years could get tougher."
On 28 June Bob Mansfield, Apple's senior vice president of hardware engineering announced he was to retire. Apparently he was very serious about retiring but was back at Apple after just eight weeks, after Tim Cook "made him an offer he couldn't refuse". Later in 2012, Cook announced that Mansfield will be staying at Apple for two more years.
Also in June was Apple's WWDC at which it launched the MacBook Pro with Retina Display and new MacBook Air, previewed iOS 6 with Maps and Facebook integration, and announced that Mountain Lion would be available in July.
Regarding Facebook integration, Moor Insights & Strategy analyst Patrick Moorhead said: "Apple caters to the masses and Facebook is the social media hub for the masses. This sounds positive for Facebook, which needs any kind of win. This will undoubtedly increase Facebook interaction but it still doesn't address the mobile monetization issue. And until Facebook figures this out, not much else matters."