Apple's decision to replace Google Maps in iOS with its own mapping software certainly has been an uncharacteristic blunder, triggering the company to issue a public apology last week from CEO Tim Cook. The issue has triggered all kinds of hand-wringing about how this could be the beginning of the end of Apple's era of domination of mobile computing. New York Times columnist Joe Nocera asserted in a recent piece that the real issue here is that Steve Jobs is gone.
But the truth is, for all the negative publicity, there is zero evidence that that the maps issue is hurting sales of the iPhone 5. Piper Jaffray analyst Gene Munster noted late last week that consumer reaction to the new phone as measured by tweets tracked by the service Investing Analytics have been far more positive for the iPhone 5 than they were for the iPhone 4S. "The bottom line is that consumers do not seem to be overly concerned about the shortcomings of Maps," he writes.
The issue for the stock has not been Maps; instead, Apple disappointed the Street with first weekend sales of around 5 million phones, rather than the 8-10 million some pundits had projected. There are various factors affecting that number, including screen shortages and the way Apple counts phones that have been ordered by not yet shipped. But the maps issue had nothing to do with it. The stock also has been long overdue for a round of old-fashioned profit taking; keep in mind that even after a recent 5.5% slide from its all-time high at $705 and change, the stock still boosts a year-to-date gain of 65%. The stock, as a reminder, ended 2011 at $403.27, and now trades for about $665.
So, I have to say, while I respect the work of Forbes contributor Peter Cohan, I take issue with the very premise of his post on the site today which asserts in the headline that Apple made a "$30 billion maps fiasco." For one thing, there's really very little reason to think that the mapocalypse has hurt the stock one iota. There are no signs of impact on iPhone sales, and only widespread admiration for all other aspects of the new phone. Maps are a highly useful feature on a mobile device, but Apple is going to fix the issues with its software, and in any case there are plenty of other apps and websites to turn to for directions for those who want another source.
The $30 billion "fiasco" is more a reflection of the astonishing market cap the company has generated over the last few years, driven by the wildly successful iPhone and iPad. Every 1% move in the stock is a $600 million catastrophe in the making. In any case, Apple has made missteps before. There was Antennagate, which created so much hoo-hah around the iPhone 4 launch that the company actually held a special press event to address the issue, and then offered to send customers free bumpers or covers. The company's Ping social network tied to iTunes has been a miserable failure. And there was the Newton, and the Cube, and stuff no one actually remembers: anyone have an eMate laptop lying around?
In short, Peter's story was a reach, and so was the Guardian story on which it was based. Apple screwed up with Maps, but there is no reason to think that the issue will substantially affect earnings. Apple's financial performance, and its stock price, at the end of the day are driven by hardware sales, not by free apps included in the iOS.
So, did Apple make a bit of a mess? Yes they did.
Is this by any stretch of the imagination a $30 billion fiasco?
No, it isn't.
