Apple vs. the Tyranny of Expectations

A blog about business and economics.
Jan. 27 2014 5:07 PM

Apple vs. the Tyranny of Expectations

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You're not happy with 6 percent?

Photo by ChinaFotoPress/ChinaFotoPress via Getty Images

On its face, Apple's Q1 earnings released today are good news. iPod revenue plummeted 55 percent, but Mac grew 16 percent, iPad grew 7 percent, and iPhone grew 6 percent. Since iPhone is Apple's biggest business, iPhone performance dominates overall results and so revenue rose 6 percent as compared to one year ago.

Sounds good. Not crazy-amazing-poised-to-conquer-the-world good. But Apple hasn't had the price-earnings ratio of a high growth company for quite a while. For a mature company this is a mature level of growth.

Except, no. The financial market reaction, in Business Insider's typically restrained voice, is APPLE TANKS AFTER WHIFFING ON IPHONE SALES. You see, though iPhone sales rose they rose less than expectations, and so that's bad. The financial market gods are cruel and fickle.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.