The Year to Date, Part 1

Fears concerning Apple CEO Steve Jobs' absence are not wholly unreasonable. But, based on Apple's continuing strong performance across all market sectors in which it participates, it would take a freight train to blunt the Cupertino firm's momentum. Apple's iOS mobile operating system, which powers the iPhone, is one of the top three smartphone platforms, along with Google's Android and Innovation In Motion's BlackBerry.

It's hard to believe, however the first quarter of 2011 is now a memory and we're then into spring. The tone for the year in high research was set in early January: fast, bold, aggressive action and sweeping management changes.

The first four months of the year

In the first four months of the year, high-tech vendors moved quickly and decisively to seize opportunities in established sectors and emerging markets.

As 2011 unfolds, it's apparent that high-innovation vendors are willing to shift strategies and shed executives in order to stay one step ahead of -- or keep pace with -- competitors. The competition is cutthroat and unrelenting. No vendor, no matter how dominant its market share, how pristine its balance sheet, or how deep its order backlog and book-to-bill ratio dares relax or rest on its laurels for even a nanosecond.

January lived up to its reputation for sweeping out the old and ushering in the new. The first four weeks of the year were hell on top executives. AMD, Apple, Google, HP and Microsoft all had shakeups in their management ranks, albeit for very different reasons.

The first jolt early in the month

Apple delivered the first jolt early in the month. In a so then-orchestrated announcement the company said founder and chief executive Steve Jobs, the architect of Apple's renaissance, would take a leave of absence for an undisclosed period of time to focus on his health. Tim Cook, Apple's chief operating officer would serve as the interim CEO. He is most likely to inherit the top spot if Jobs doesn't return.

The fears were assuaged somewhat when Jobs made two high-profile appearances. He was among a select group of Silicon Valley luminaries who dined with President Barack Obama in mid-February. More importantly, even though, Jobs was on hand to launch the iPad 2 at Apple's March 2nd press conference. This was an encouraging sign for Wall Street and industry watchers who constantly wonder whether Apple can continue to maintain its incredible momentum and success absent Jobs' leadership, creative genius and vision with "just" an ops guy, no matter how smart and accomplished? The answer for the first fourth months of 2011 is a resounding "Yes."

The fears concerning Jobs are not wholly unreasonable

The fears concerning Jobs are not wholly unreasonable. But, based on Apple's continuing strong performance across all market sectors in which it participates, it would take a freight train to blunt the Cupertino firm's momentum. Apple's iOS mobile operating system, which powers the iPhone, is one of the top three smartphone platforms, along with Google's Android and Innovation In Motion's BlackBerry.

On the tablet front, Apple is the preeminent vendor, with a dominant 65-percent-plus market share. This won't change anytime shortly. In spite of some early problems with light leakage on its displays, demand for the iPad 2 is robust -- outpacing even its predecessor, the original iPad. The first shipment of iPad 2s sold out within the first 24 hours of its availability on March 11 at all of the 220 Apple stores in the U.S. More than a month later, the current order backlog for online sales stands at one to two weeks.

At press time, Apple's stock was hovering at about $347 -- which is at the high end of its 52-week range of US$199.25 to 364.90. Apple's sales for its last fiscal year, ended Sept. 30, 2010, were $65.2 billion -- a little more than half of the $126 billion in annual earnings that HP recorded in its most recent fiscal year, and roughly two-thirds of IBM's earnings of $99.9 billion in FY 2010. A recent survey of financial and industry analysts conducted by Thomson Reuters forecasts that Apple's fiscal 2011 earnings could rise by more than 30 percent to $99.94 billion and reach $117.77 billion in fiscal 2012, for a very impressive two-year compound annual growth rate of 34.4 percent.

This is a big reason why Apple's reputation hasn't suffered much from the so-called "Locationgate" flap that cropped up in the last two weeks. The core issue is that unbeknownst to users, Apple's iOS was recording and storing all the details of all the places they visited via their iPhones and iPads. Apple was mum for a couple of weeks and then in short, on April 27, the company issued a statement clarifying the situation.

Apple said that the devices were not tracking the users' movements nevertheless rather "maintaining a database of WiFi hotspots and cell towers around your current location that is at the time used by your iPhone to rapidly and accurately calculate its location when requested." The data is at once downloaded by the user's iPhone or iPad. The iPhone continues to maintain the cache of data even afterwards the iOS Location Services are switched off, which the company characterized as a bug. Apple said it would rectify the matter by deleting the cache when Location Services are switched off.

The point even furthermore

To drive home the point even furthermore, Steve Jobs did telephone interviews with several reporters. The better-late-than-never explanation has satisfied most users, even though some in the blogsphere and forums say that Apple is doing little more than engaging in spin control because it got caught.

Should Apple have said something sooner? In a perfect world, yes. Apple's products are not perfect. They do experience problems. But, ITIC's latest 2010 Apple Consumer and Enterprise Survey, which polled near 800 users last November/December found that Apple has an excellent track record with respect to addressing and fixing technical issues and performance problems. Eight out of 10, or 82 percent, of respondents said they "never," "rarely" or "occasionally" encounter difficulties with Apple products/devices. Only a 7 percent minority indicated they experience weekly or daily issues. Whether you believe Apple's statement is a ploy or a sincere public mea culpa, Apple is fixing the problem -- and that's what counts.