Tell me if you’ve heard this one before.
Wall Street consistently shows that it has its head in the clouds and is about as far away from Main Street as could be. The example that I love the most is when a company issues an earnings report where things went well during the previous quarter and it actually turns a profit, yet their stock gets pounded because some analyst proclaims, “Yes, but it didn’t reached our estimates, so we should worried about the company's health” (this has happened to Apple many times). Here’s the bottom line that doesn’t require a Wharton School MBA - you make money, you stay in business. You lose money, you go out of business. Apple has made a lot of money as it’s estimated $145 billion (yes, that’s with a “B”) cash on hand shows. I’d say that’s pretty healthy.
Customers line up outside the Apple store on 5th Avenue (Image credit: AFP/Getty Images via... [+]
Back to the latest iPhone launch (which actually outpaced estimates by quite a bit according to Apple) - One headline of the weekend read, “Long lines But How About Sales?” Hold on here a second. Do you actually think that people are going to stand in line for hours just to look around? How about the speculators that are paying dozens of homeless people to stand in line to purchase multiple phones, or the fights that break out over line position?
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What does this story have to do with the music business? How about everything. The production ecosystem for music (not to mention film and television) is built around the Mac platform. Most audio pros would never use a PC because they just don’t need the inevitable extra hassles that come along with whatever operating system Microsoft happens to thrust upon it. A healthy Apple is a necessity to keep everyone’s workflow warm and cozy.
Then you have the music business itself, which for better or worse is now built around iTunes for downloads and soon streaming (see my article from last week about why that I believe that will happen). The fact of the matter is that Apple really is now a mobile company built around the iPhone. People may not consume all of their music there, but they will more and more as they realize they have a new supercomputer in their hands. Once again, a healthy Apple is essential for any semblance of a music business recovery from its recent doldrums, at least in the short term.
The interesting thing is that while Wall Street and the press focuses their myopic vision on some analyst’s predictions, Main Street (where everything that ultimately matters really happens, by the way) could care less and goes to their nearest Apple store to wait in a line that reaches around the block. Hey press and analysts, the time to go negative is when those lines stop. For now, Apple really is healthy and thriving, and the music business couldn’t be happier.
