Thursday, January 08, 2015

Why Apple Doesn’t Need to Attend CES 2015

Apple is markedly absent from CES 2015, so why is AAPL such a hot topic this week? The answer is simple - Apple's sales are fine without CES.

This year’s Consumer Electronics Show is the place to be for tech companies and businesses on the cutting edge of digital evolution. Consumers and industry professionals from around the world hail to Las Vegas each year for a front row seat at the first glimpses of tomorrow’s technology. Every company that’s even remotely related to the tech sector is attending CES 2015.

Well, almost every company.

Missing from the list of more than 3,600 exhibitors is Apple Inc. (AAPL). The iPhone maker has intentionally avoided the annual event since 2011 (but a number of AAPL employees were spotted visiting the show).

Every year, there’s a plethora of gossip, scandal, and guesses about why one of the biggest, most influential technology companies on the planet refuses to attend the yearly showcase.

However, instead of guessing about what we don’t know, let’s focus on what we do know. The most relevant point here is simple — Apple doesn’t need to attend CES 2015.

Sept. 27 marked the end of AAPL’s fiscal 2014 fourth quarter, and the company reported revenue of $42.1 billion and net profit of $8.5 billion, compared to $37.5 billion and $7.5 billion year over year, which is an increase of 12.3% and 13.3%, respectively. EPS was $1.42, up 20.3% from the year-ago quarter’s $1.18. Annually, AAPL recorded almost $183 billion in revenue and $40 billion net profit.

Has Skipping CES Hurt AAPL?

Obviously, Apple has been successfully marketing and selling its wares, so management’s decision to forego CES participation wasn’t a bad call. Actually, from a sales psychology perspective, the company’s intentional avoidance of the world’s biggest tech event portrays confidence and superiority. In fact, AAPL has received additional publicity as the media speculates about its CES 2015 absence.

Apple also has a history of sabotaging events like CES, usually by announcing its newest products or release dates at the same time. It’s an impressive display of corporate muscle flexing when Apple can dominate headlines in the middle of a major internal tech event like CES 2015 without even being there.

Consider this very article as a prime example — instead of describing LG Display Co Ltd.’s (LPLnew washing machine, or Samsung’s (SSNLF) curved 88-inch UHD television that uses nanocrystals for brighter images, I’m writing about AAPL. But, Apple didn’t attend CES 2015, nor has the company presented any amazing new products this week. We’re still here, though, with me writing and you reading about the company that hasn’t even done anything new.

From a marketing standpoint, avoiding CES 2015 is good for AAPL. The company doesn’t need the event to generate buzz and attract customers. Case in point: Last quarter, Apple sold more than 39 million iPhones — that’s almost 300 per minute — and AAPL stock price rose 8.4% during the quarter.

The company’s own events create enough of a media frenzy, without the distraction of every other competitor in the entire tech marketplace being ten feet away. In the month following Apple’s iWorld event last March, AAPL stock jumped 11.3%.

Bottom Line

With the additional exception of Google Inc (GOOG), skipping out on CES 2015 would be something akin to corporate self-sabotage for almost any tech company. But when you’re king of the tech industry (with a global market share of nearly 12%, market cap of more than $620 billion, and total assets exceeding $232 billion) you can afford to do things differently.

With a history of world-altering innovation dating back nearly four decades, consumers have learned that, for AAPL, success has been via incremental innovation. Fast Company hit the nail on the head saying, “Apple has never been a nonstop, new-product machine,” and this truth is why the company can bail on CES 2015 without a problem.

Article originally appeared on (1/8/15)

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