Rush Limbaugh

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RUSH: I get e-mails about things I don’t even tell you. Folks, my e-mail is really populated with people wanting me to explain how it is — and I haven’t mentioned this because some of you get irritated with Apple. You don’t like Apple. You think they’re a bunch of commie libs, and there’s the Stick-to-the-Issues Crowd. When I talk about Apple, it’s like when I used to talk about golf. People get mad.

But I’m gonna talk about this. I get a lot of e-mail. “We want to know, Rush.” Something just happened. Apple just announced a record quarter. They sold a record number of iPhones. They sold a record number of iPads. They had a record profit. They made more in profit in one quarter than Intel makes in a year, for example. Their profit was $13 billion, $13.01 billion, for the second quarter in a row.

They sold 51 million iPhones.

However, somewhere in the media in the past six weeks — I’m not making this up — there was an analyst, meaning somebody that works at a brokerage firm (Anastas Mikoyan, it doesn’t matter; it’s a nobody) who sent a note to investors that he expected… He doesn’t work at Apple. He doesn’t know anything. He doesn’t know anything. He said, “We expect Apple to sell 55 million iPhones.” So Apple announced on Monday that they’d sold 51 million. That’s four million more than they sold in the same quarter a year ago.

Apple has lost nearly $35 or $40 on the stock price since. The media, the tech media is reporting on what a major disappointment this was. I’ve got people asking, “Rush, how can this be? What is going on? Why is Apple hated? They have a record. They’re outperforming everybody, and they get all this negative news driving investors out of the stock and so forth.” It’s real simple, folks. There are a number of different ways I can explain this.

One way to understand it is — as far as the financial media is concerned, and to a certain extent the tech media — Apple is to the media what the Republican Party is to the news media. They’re simply despised. Now, in Apple’s case, there are specific reasons for it. One of the reasons Apple is despised is because they’re the biggest. But there’s another reason: They don’t leak. Now, you might think this is silly, but Apple doesn’t have one person in that entire corporation that calls anybody in the media and tells them anything in advance.

They do not leak.

There is nobody at Apple that has a closet working relationship (as most organizations, political parties, individuals do) with the media. The normal way that you buy good media coverage is to leak, become a source, buddy-buddy. Apple does not do that — and that means it’s payback time. It is that childish. There’s also the fact that they’re just the biggest. They are a tech superpower, and so they’re automatically a target. But it is personal with some of these people. It’s the strangest thing.

A nameless, faceless analyst somewhere at a stock brokerage firm you may never have heard of can simply say, based on absolutely nothing, that he expects Apple to sell 55 million phones, and that becomes the media expectation. That becomes the standard against which Apple’s gonna be measured.

Now, Apple, like every other company, issues guidance. They try to tell the market what they expect in the next quarter, what it’s gonna be, and they were right in the middle of their guidance. They didn’t mislead anybody. They didn’t undersell it. They didn’t oversell it. They came in right where they led the media and the investment community. There were no surprises. But because one person, and then it ballooned to everybody, but one person said they’re gonna sell 55, and they sold 51 million, and that’s it. And that becomes they can’t innovate anymore since Steve Jobs died, no new products since the iPad. They’ve lost their mojo. It’s an amazing thing.

Now, on the other side of this, you got Carl Icahn, who bought $500 million of Apple the day the report came out. If you follow the money you find out they’re doing fine. It’s one of the best run companies in the world. It’s one of the most solid companies in the world. It’s almost as dependable as the US government financially, meaning government can’t default. Apple is solid. It’s an amazing thing to watch, and, if you’re invested in them, it can be very frustrating because you watch a bunch of people who have no idea what they’re talking about talk the stock down. And there are other companies treated like Apple is treated.

But, on the other hand, you’ve got Yahoo — well, not Yahoo. Let’s take Amazon. Loved and adored and constantly praised, and they never turn a profit, by design. And their stock price is talked up and so forth. So, in this sense, Apple doesn’t leak. They don’t have these close, buddy-buddy type relationships. They believe in secrecy. They don’t want their competitors knowing in advance what they’re doing. They’re pretty good at controlling what comes out of the company officially in advance of anything, at least early on. And that kind of relationship with the media and with analysts can create, “Okay, you’re not gonna play ball with us, you’re not gonna cooperate with us, you’re not gonna be our friend? Okay, here’s what we’ll do to you.” And that’s part of what’s going on.

It’s the same thing that happens to the United States around the world. We’re despised simply because we’re best. We’re despised because we’re the biggest. We’re despised because we’re the richest. What’s different about all that now is that it used to be that we were despised by foreign entities. Now the people running the country feel very close to the same way about the country as the foreign entities do. That’s what makes it problematic and dangerous now.


RUSH: If you’ll remind me tomorrow, I’ll answer that. “So then why don’t they make a bigger screen phone? Why don’t they make a bigger screen phone like Samsung?” I’ll be happy to answer that. Anyway, it’s just fascinating. Let’s say the average profit on an iPhone sale, I’m gonna pick a number that’s close, $300. And so they sold four million fewer phones somebody that’s not even in the business thought they were gonna sell, that’s $1.2 billion of income they didn’t make. The stock is down $40 billion because of this. It’s irrational, except the market is rational. That’s the thing. There are reasons for this. They might not make sense, but that’s markets for you. We could spend an hour on this if I thought you were interested.

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