SCOTT SIMON, HOST:
The letters A-A-P-L no longer stand for the most valuable publicly-traded company in the world. The price for a share of Apple, Inc. declined throughout the week, until Exxon reclaimed the top spot on the NASDAQ. Now, this news comes after Apple posted revenues that were lower than expected. And meanwhile, that other tech giant, Samsung, has been growing even larger. Samsung had a record-breaking report of its quarterly profits this week. Joe Nocera joins us - an op-ed columnist for the New York Times and financial expert. He joins us from Sag Harbor, New York. Joe, thanks for being with us.
JOE NOCERA: Thanks for having me, Scott. And how the mighty have fallen.
SIMON: Well, all right. First, let's take a measure of that. Exactly how huge was Apple last year?
NOCERA: Apple was by far the most valuable company in the world, far exceeding Exxon and everybody else. Its stock has tumbled not quite in half but it's basically gone from the low-700s to the mid-400s, and in the blink of an eyelash. It's really been very, very quick - the last maybe three months this has taken place.
SIMON: Now, all of this, you know, being said, the reported profits this week are on the scale that a lot of companies would envy.
NOCERA: That's right.
SIMON: So, why did investors react the way they did?
NOCERA: Well, investors are always thinking about what's coming in the future. They are not that concerned with what's happening in the present. And so, Apple had a terrific quarter. They pretty much met expectations. But the markets have become so used to Apple vastly exceeding expectations and the market's become so used to Apple's sort of coming out every six months or a year with some innovative new product that everybody has to have - and that's not happening. And so the market is basically looking for somebody else to fall in love with. And there is Samsung.
SIMON: And so are they doing what Apple, at least this quarter didn't do, or is Samsung rolling our new technology, new got-to-have products?
NOCERA: Well, the Galaxy series, which is, you know, smartphones, you know, pads, so on and so forth, has been a huge, huge hit. I read somewhere that they went from having sold 30 million Galaxy smart - the new Galaxy smartphones to 40 million in a space of two months. People really like the phones, they have a good advertising campaign and they're less expensive than Apple. And we're at the point in the smartphone market where that matters.
SIMON: Yeah. And how much is the patent dispute that's been playing out for the past few years have to do with this? Anything?
NOCERA: Well, sure, it has something to do with it. Most - these smartphone patent wars are really kind of absurd. What really usually happens and what ought to happen is that you get in a patent fight and you very quickly use the patent fight to cross-license the patents that the other guy has that you need. But Apple has been asking for something really quite extraordinary in these smartphone wars. They've been asking for an injunction to pull some Samsung products off the market. And that tells you how seriously Apple takes Samsung as a competitor. I should also add that I virtually do not believe that there is a judge in the United States that will allow that injunction.
SIMON: It also, of course, is irresistible to note that these figures come when Apple now has a pretty much brand new CEO, Tim Cook.
SIMON: Following the death of Steve Jobs.
NOCERA: You can't avoid that. And certainly there are a lot of people who believe that if Steve Jobs was still alive, Apple would still be the market's golden boy and it would be still coming out with innovative products. I'm not convinced that that is true. Every company has its moment in the sun, especially a company like Apple. New products are two, three years, you know, to get to market. And so, you know, it's impossible to know whether Steve Jobs' death has factored in here.
SIMON: New York Times op-ed columnist Joe Nocera, who joins us from Sag Harbor, New York. Joe, thanks very much for being with us.
NOCERA: Thanks for having me, Scott. Transcript provided by NPR, Copyright NPR.