Donald Drapkin: Without Steve Jobs, innovation at Apple will never be the same

“Following better-than-expected results by Apple (AAPL) last night, and a weaker-than-expected outlook for revenue this quarter, which has pushed the shares down nearly 8%, the activist investors took to the airwaves,” Tiernan Ray reports for Barron’s. “Said [Carl] Icahn, ‘I’ve made a great deal of money buying on these dips of companies I think are no-brainers,” especially when I think the reason for the dip is completely mis-interpreted.’ Icahn’s segment was followed by an on-camera interview with Donald Drapkin, founder of Casablanca Capital/”

“Drapkin was asked by Wapner about Icahn’s remarks on Apple,” Ray reports. “After noting that he’d bought Apple shares years ago when he saw someone with an iPod on the Street, but sold the stock when founder Steve Jobs passed away, Drapkin said that he had been an ‘acolyte’ of Jobs, and couldn’t see the company being as successful without him”

Ray reports, “Said Drapkin, ‘My problem with Apple is that there are better things to buy. If you look at the last earnings release, the iPod is disappearing. People worry that the iPhone is going to disappear, mainly for the same reason, that there’s tremendous competition. And the iPad, which is a brilliant product, is also coming up against tremendous competition. So while the company is going to earn money for a long period of time, and is terrific, I think Carl’s right, I just don’t think without Steve Jobs there’s that next great thing. I think Google (GOOG) has the guys that create the next great thing.'”

 
Read more in the full article here.

MacDailyNews Take: Obviously, Drapkin doesn’t know jack about Apple since he’s worried that “iPhone is going to disappear, mainly for the same reason [as iPod],” a reason that he clearly doesn’t understand in the first place because standalone iPod sales are “disappearing” because every iPhone and iPad is an iPod, too.

Just counting iPhones and iPads, Apple sold 77 million “iPods” last quarter alone.

If you believe in the maxim “invest in what you know,” Drapkin was smart to sell Apple. He never should have bought any at all.

Yes, there have been missteps, more than we’d like or than we expected (Maps, Browett, iMac drought, etc.), and, yes, without Steve Jobs, Apple will never be the same, but people who underestimate Tim Cook’s Apple are in for a rude awakening.

Patience. Not much longer now.

28 Comments

    1. Out of Google’s properties, I use Gmail, search and YouTube the most, and occasionally Maps when Apple Maps fails me or to double check the results of Apple Maps directions. I don’t know much about Android because I don’t use any Android product. Having said that I’d go out on a limb to say that for Google to surpass Apple, at least in the consumer and business computing market (leaving aside the geek market for the moment), the following will have to happen:

      – have a real human behind customer support
      – improve user interface (UI) by a factor of 100
      – improve usability, which is mainly but not wholly tied to UI, by a factor of 100

      I am sorry to see that Apple has chosen to take iOS 7 down the path of Google-inspired whiteness and flatness but I truly hope that it’s a passing phase. Google products are virtually unusable because of design limitations due primarily to the very thing that makes iOS 7 so repulsive to use – a complete lack of eye popping design.

      I don’t see Google overtaking Apple in the hardware field any time soon, unless we’re talking about driverless cars, and even then Google can’t get its act together despite investing hundreds of millions in R&D.

      1. “I use Gmail, search and YouTube the most, and occasionally Maps”

        All of which are free ad supported products. (Android is included in that category) Search is Google’s money train, much like Office and Windows is to Microsoft. Not much new coming out of Google in the money train category.

        Apple makes items that people are willing to pay for, and wait in long lines. Google isn’t even in the same league.

  1. Hope you are correct MDN–my patience and loyalty with this stock are coming to a crossroad……….unfortunately–this stock should be much higher, would like to see my investments grow before retirement instead of the alternative, a 2.5% dividend is simply not enough.

    1. Some perspective is helpful. If you were an investor in MSFT after Bill Gates announced his retirement, what would your investments be worth today?

      I wouldn’t worry about Apple for quite a while yet.

    2. Stock performance has very little to do with company performance or product performance. It has everything to do with Wall Street insiders manipulating it to make money. The sooner you understand that, the sooner you’ll stop being disappointed by Apple’s stock price.

  2. As I always wrote, it is too early to judge how good or how bad Apple is/could be without Jobs.

    iPhone 5/5s, iPad Air, Mac Pro — all those products were started at the time when Jobs was the CEO. Possibly, television project, too, if it is going to be released.

    After-Jobs-Apple will be only seen in couple of years.

    1. I feel that innovation at Apple is going to stay the same. It is what Apple does. Take something that is way more complicated then it should be, strip it down to the basics, and make it Just Work.
      Now some aspects of implementation may not be as they were.
      Take the Apple Campus 2. After Steve spent all that time on the yacht, you don’t think he was not going to be as detail oriented with that building? The Granite Paving better match. The Terrazzo Shall have the same particle distribution, everywhere. The materials on the opposite walls of the restaurant will be symmetrical. And don’t get me started on the Bleached American Oak… 😛

  3. “Patience. Not much longer now.” As a long time AAPL share holder and investor, I am getting extremely tired of being told that I need to have “patience”.

    If Tim Cook and the Apple board do not learn how to walk and chew gum at the same time, they need to start spending time with their families and let those that can do more than one thing at a time step up and do the job!

  4. Jobs was ill for a long time and he knew of his mortality. He left enough of a road map for Apple to follow. The 5C was a misstep but didn’t help. The bigger issue is the new economy and market saturation of smartphones.

  5. I think it’s true. Jobs truly enjoyed what he did. It was not a job. He didn’t NEED the money. He was confident and secure enough at Apple to do what he pleased and use it to fulfill his goals. No one at Apple is ever going to have the freedom that Steve had.

  6. MDN is a waffle iron! 1st Apple is mismanaged, now whole hearted belief in Tim Cook. Tim is the classic corporate brain. Those brains do not create. They evaluate. Tim is never going to get it done. Jony Ive has great aesthetic sense, but seems limited to how to design better that what already is. It is creating the thing that no-one knows they need that Steve (and his team under his direction) did.

      1. Completely disagree. Is the iPhone 5s an ugly duckling? How about the iPad air, or iPad mini? How about the Mac Pro? No, no, no and no.

        We get that you don’t like iOS 7, but many of us do. It’s different, and it’s intended to be very different rather than the evolutionary changes Apple gets slammed for with its iPhones and iPads.

        1. Ive is a hardware maven. Of course he’s going to get the design of the iPhone 5S right. After all how different is the iPhone 5S from the iPhone 5 in terms of overall shape and form? They share 99% parts and design commonality, leaving aside the innards and CPU. The only visible difference is the TouchID fingerprint sensor.

          As for the iPad and iPad mini, these are well established designs based on the design language of the original iPad which Steve launched. Nothing radically different there. Not that I mind the evolutionary design – Steve obviously thought long and hard to come up with a winning design which still has some legs on it for the foreseeable future.

          I’m talking about a new field in which Ive is venturing into without Steve’s guiding hand, and that is software design. iOS 7 is flawed in so many ways, from a design, usability and core functionality perspective. It’s almost as if Apple threw its famous attention to detail out of the window in rushing iOS 7 out the door. If they can’t get it right, I’d rather they stifled iOS 7 at childbirth rather than spawn a retard.

  7. What caught may eye is the disappearing iPod argument. The guy looks at a single number and draws a totally clueless conclusion. The iPod’s market share in its own market space (portable media players) is still powerfully dominant. It is clearly NOT disappearing in the sense that it is NOT ceding share to competitors. The whole market space (portable media players) is disappearing on its own, and iPod user base is shrinking with it.

    This reminds me of the planet Venus and its dense clouds surrounding it. Before the first Venus probes landed, many had thought that because the planet is wrapped in clouds, its surface must be a vast swamp. It’s so easy to draw stupid conclusions when observing things completely out of their context.

  8. Certainly small capacity portable music players are losing sales because iPhones can carry enough music for the casual listener.
    For those who have a deep interest in music, and high-quality at that, the lack of a decent high-capacity player like the Classic, but with 256Gb capacity is really disappointing.
    However, all is not lost, now that LaCie have introduced a wifi-equipped, self-powered portable hard-drive with 1Tb capacity, and a Seagate app to stream music from it; meaning any iPhone automatically has access to a personal ‘cloud’, which up to five devices can access, and even upload photos and such to.
    My ideal portable music system has now come to pass!
    Hallelujah!

  9. Apple will never be the same without Steve Jobs. Apple will be different. It will be incumbent on Apple’s directors and officers to continue to push innovation, which they are doing — just look at the Mac Pro.

    The problem this guy has is he is stuck in the past. The future is unknown, and therefore scary, so he must bash it and run away from Apple.

    And he’s running to Google?!? Google can’t do anything fully. Our Lady of the Perpetual Beta has dipped all 23 mutated toes into different pools of wildly varying “innovations”, and I’ll wager none pan out well for consumers. Time will tell, but Google is going to do not much more than pay a bunch of engineers a lot of money to play in labs for the next 20 years, with virtually nothing to show for it.

  10. Drapkin is an idiot.

    Yes, let’s add that to the Google search. Look for Drapkin and find the above statement.

    YES. WE GET IT! Apple will always be different under any other CEO than Jobs. Fact of life. Apple will make missteps. Guess what? Apple made missteps UNDER Jobs.

    I would like to remind the world of Apple’s (world-changing) innovations.
    1984 – Mac
    2001 – iPod
    2007 – iPhone
    2010 – iPad(???)

    I’m not sure I fully count the iPad because it really is just an overblown iPhone (and YES, I get the added benefits of the iPad over the iPhone).

    Count ’em. FOUR. THREE, if I’m being conservative. ALL in a 30 year time span. So, all the callers for Apple innovation, SHUT THE FUCK UP and try doing some innovation yourselves.

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