“The recent Apple earnings report reminds us there is a specific agenda in mind by investors and analysts who cater to investors. That is, gain smartphone unit share growth and dominance at any cost,” John Martellaro writes for TheStreet.
“The reasoning behind the agenda is as follows: If Apple can seize the upper hand against smartphone competitors by virtue of increasing unit share, then the competitors suffer and Apple dominates the market. That means that, unfettered by realistic competition, Apple can grow exponentially. That, in turn, means Apple becomes a growth stock, insofar as smartphone sales go, and that’s a significant portion of Apple’s revenue,” Martellaro writes. “A growth stock means that X dollars invested now will bring X + Y dollars at some short-term point down the road. In other words, Apple puts money in investor pockets. Any Apple strategy that doesn’t do that is disagreeable.”
Martellaro writes, “Some investors would rather ride the Apple stock for all its worth, cash in, watch Apple fail, then move on to the next growth opportunity. CEO Tim Cook, being a good steward, isn’t interested in that scenario.”
Read more in the full article here.
MacDailyNews Take: Those who underestimate Tim Cook’s Apple are in for a rude awakening and, newsflash, Apple sells premium products at premium prices to premium customers.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Cook tried but failed to extend the reach of the iPhone to more cost conscious consumers. What we would call the cheap end, although there is nothing pejorative about the word cheap here. If it offends you, use the word affordable instead. In any event he tried to pursue a strategy to sell iPhones to the cheaper end of the spectrum but failed because customers did not perceive any value in a plastic phone costing $100 less than an aluminium one.
I think Apple has been somewhat stingy in offering a true economy product by not cutting prices far enough to reach the low end. The smartphone industry depends on mass adoption in order to attract the best developers and after market accessory makers not to mention hold on to consumer loyalty as a product that is seen by peers to be worth having.
Using the iPhone 4S as a cheap weapon is a flawed strategy because the limited memory (8GB) leaves a bad taste in the mouth giving consumers a negative perception of Apple. I would have withdrawn the 4S from sale and discounted the 5C aggressively to move phones, particularly in China and developing countries.
I think you have stuck on one item and missed the main point.
Instead of making a cheap phone, making the Brand look bad and losing money, Apple is working with India to sell phones on time so that people can use the phone while paying for it.
Numbers I have seen indicate that its working well enough that Samsung is trying it.
Where is the corp office of ANDROID located? People keep talking about it like its one thing.
Whats going on at MDN? One day there is a mile long list about mismanagement at Apple; which, although sad to see, I think I agreed with. The next day there is a “Those who underestimate Tim……….”.
MDN, I hope you have someones ear at Apple regarding those mismanagement issues though. Hopefully, it’s Tim himself.
I think they call it manic-depressive.
Or bypolar.
Yes, there is an apparent inconsistency between MDN’s Apple “mismanagement” list and their confidence in Apple’s manager. I wonder if “learning from his mistakes” covers this point, but it would be interesting to have MDN clarify their position.
Folks need to quit ragging so much. Realize, Samsung is a follower. It doesn’t innovate, it throws a bunch of s*hit against the wall and sees what sticks. And guess what, larger screen, even though a s*hitty user experience stuck.
Apple doesn’t throw s*hit against the wall. It innovates and leads.
But and this is a big BUT, when a product is popular, it’s OK to follow. Hear us Apple ITS OK TO FOLLOW some times.
MDN may not agree with everything that Tim is doing differently from what Steve would have done, but you still can’t deny that Apple is a tremendous success on many fronts. Unlike their competition, they don’t aim to create disposable junk that needs to be replaced frequently.
Yeah, like you I certainly agreed with MDN with its list of Tim’s/Apple’s missteps yesterday. And yes it is sad. I’ve been an Apple guy and investor for decades, so it is sad. But it is what it is. Those who fail to recognize and admit mistakes are the people who continue to make those same mistakes. I thought the list was objective and very fair. Not a list from an Apple hater or fanboys point of view. Simply objective and accurate. It was refreshing to see an honest appraisal of the situation. But after all, these articles aren’t reprinted for fun. They are printed to get viewers who will click on stories and in the process view ads. Readers respond to controversial headlines and subjects. If it bleeds it leads. Sensationalism. Doesn’t have to be accurate. As long as it will draw the reader in. The site is here to make money. Not to make anyone happy. There’s nothing wrong with that. We all have to make a living. I glance at the articles probably three or four days a week and post occasionally. But it’s sad to see the same people on here every single time I look at MDN. I mean every single time, it’s the same people. Must be a lot of people with a lot of free time on their hands? These people need to do something constructive with their free time. But I do believe that MDN is truly tiring of Tim Cook at the helm. Personally I think the man is trying very hard but is trying to navigate a very large ship. I still believe that Apple and AAPL need someone championing the company. They need a face. You just can’t continue to be as smug as Apple has been. There’s too much competition now and someone needs to push the product. And perhaps Tim is not the guy to be the CEO? Just because Jobs put him in that position doesn’t mean that it is working. If your strong point is supply-chain management then perhaps that’s where you should be. Something needs to improve in Cupertino.
I do like Tim Cook. I do think Apple is about to lay the hammers down. 2014 is gonna be interesting.
2014 will not be like 2014.
The late Mac Pro and the fact 2013 should have seen the introduction of a larger iPhone have bugged me as an Apple shareholder and user. It seems that we only see this stuff out of Apple at the final excruciating point of exasperation. I am a diehard love of all things Apple, but as a shareholder I would like it if they would take certain competitive steps a little sooner than later. I am hoping 2014 will be an outstanding year of surprises and crowd pleasin’ goodies from Apple.
I am in a similar boat with you. Tim promised new products in 2013 and now it is shifted in 2014 which means wait for June IOS update and Oct 2014 for products which means mass deliver in 2015.
Apple execution speed is slower than molasses and in the mean time the cheaters keep throwing mud on the wall and some stick such as large screen phone.
I am hoping that the upcoming changes are so important that a greater lead-time has been required to implement them. However, in Tim’s defense, the boat wasn’t fine-tuned for him and that doesn’t happen immediately. Hopefully it’s to his liking now so they can fire on all cylinders (or power with all batteries if we’re being up to date).
“but as a shareholder I would like it if they would take certain competitive steps a little sooner than later.”
As a passionate user of Apple products and a shareholder, I could care less about the Mac Pro or a larger iPhone; no use for either and I’ll go out on a limb and state, the majority of shareholders don’t care either.
As a shareholder, I’m glad Apple isn’t copying the roadmap for Android hardware. Samsung can bring ten different styles of phone to market, they’re desperate.
Apple can’t afford to be wrong. Not even once, because they’ll be whipped in the market square by the Tech press, if they bring an also-ran to market.
iWATCH WILL OUTLIVE IPHONE, just as iPhone is now cannibalizing unit sales from the iPod division.
All manner of phones will have a good run, but it won’t last. Apple will see to it, something better and smaller will possess all of the functionality of today’s iPhone.
I wish people would not say things like “I could care less about Apple Product X because I don’t need it.” The Apple world in general you should care about being healthy and be happy people need different things from Apple. I would disagree that Apple shareholders in particular don’t care that Apple keep the fires stoked and if that means larger iPhones so be it. I used to be more intransigent in this regard too but then saw the effect being spun on it. Coming out with a larger iPhone is not taking the Samsung roadmap. Who said Samsung ever owned the size idea? Apple is already being “whipped in the tech press” for not bringing out a larger iPhone by now. The main thing is not to compete in the low end. A larger phone will still command a premium price.
I hate wearing watches or rings. It would have to be incredibly compelling to make me go back to something on my wrist. But I wouldn’t badmouth other people for wanting it. Different strokes. You can’t keep the larger iPhone/iPad genie bottled up forever.
“I wish people would not say things like “I could care less about Apple Product X because I don’t need it.””
You mean the way everyone here is bashing Tim Cook?
No a different subject, obviously. Every Apple product is important to someone and should be respected filling a requirement even if more a niche, like Mac Pro’s. That’s all.
Perhaps I could have worded it differently, but I don’t need a trucks anymore.
Steve Jobs never used the latest Mac Pro and I won’t either.
That’s where we differ. Working in VFX (and Jobs didn’t) I need one. Unfortunately I have to get a 15″ Mac Book Pro RD first. (Do I hear a sarcastic sad violin playing?) My old Mac Pro’s will have to hold on a little longer.
I think there’s a strain on quality supplies. Apple does not cut corners when it comes to the materials they use to build their products. Remember how long it took them to come out with a white iPhone? It had to be perfect.
Analysts and journalists are always using the word ‘investors’ when they really mean ‘speculators’.
Speculators certainly don’t understand how Apple works, but there again they never have. Speculators want a short term financial gain without any regard to the longer term, while investors take a longer term view.
The real explanation is that Tim Cook infuriates speculators, but is appreciated by investors.
I’ve been long since 2007 through good times and bad. I’m an investor and those analysts speak for me.
investors by definition are speculators. your nitpicking offers no value. we suspect also that you have no greater insight on future Apple moves than anyone else here. enough with your condescending attitude toward people who put their money where their mouth is. Apple is getting ample criticism from investors because investors are the ones who are hurt when Cook screws up. The loudmouths here with no skin in the game should remember that.
Paul – you are totally wrong about the uninformed assumptions you make. If you took the trouble to read other postings on MDN, you would realise that I am an investor ( and also a speculator ) and that I have explained my strategy.
I have put my money where my mouth is and have been an Apple investor for many years and in quite a big way too. I’ve been through the good times and the bad times and I’ve learned from the experience.
Some of my shares were bought and held for many years, while another load of shares are traded regularly, taking advantage of the volatility created by the speculators. As it happens, in recent years, the actively traded shares have accumulated far better than the ones that were simply held, but I would prefer that shares were not treated as a casino game. However, if they are, then I can use my knowledge of Apple to maximise my returns on AAPL.
In Sept 2012, I sold about half of my long term AAPL at very close to their peak valuation and bought a house with the profits, having benefitted an eleven-fold increase in their value. Don’t you come here with you snivelling little ways trying to suggest that I don’t have skin in the game.
I have done very well from AAPL and have expectations of doing well in the future. Tim Cook has made some excellent decisions and I have every confidence that he will steer Apple very wisely for years to come and has not, nor will not screw up.
My confidence in Apple is such that today I bought a load of AAPL, triggered when it dropped to $499. That was funded by the AAPL I sold last week for just over $550, so I now have about 10% more AAPL than before.
I too sold in September 2012. All of it. And have made good use of all that profit since. Have been an investor in AAPL for decades. I don’t consider myself a speculator though. I simply learned the hard way (by losing my ass in 2000 ) that when you have made a good profit you need to take that profit and live to fight another day. If not you will be trying to play catch up because what goes up goes down. That applies to all equities. Buy-and-hold forever is not a plan. Once AAPL reached $400 I started using options. It’s not speculating. It’s not daytrading. It’s just a better way of investing. Options/futures have been around forever. It’s nothing new. It’s not seedy and sneaky. At least for me and millions of others it is a better way to invest. There are those here who criticize people buying options. Why? Unfortunately that is human nature and the characteristics of some people. Criticize what you don’t understand. It’s easier to criticize then to take the time to understand something. Especially if your investing hasn’t worked out lately. For the last 15 months. So I’m no speculator just an investor. But in the last 15 months most of my money has gone in other areas besides AAPL. And I was never all in with any one stock. Those who do not diversify are fools. Priceline, Google, Netflix, Amazon, Disney, Costco and Time Warner have treated me very well in the last 15 months. Extremely well! It’s all about attitude. You can complain that your stock isn’t doing well and that other stocks are and that it isn’t fair or you can be an adult and do something about it. Complainers never make money. Whining and jealousy are not only poor character traits but unproductive. Especially in investing. Just look around when you go to work. How well liked and successful are the few people you work with that do nothing but complain and whine all the time? They’re embarrassing. And I’ll bet that you feel sorry for them. Because they’d rather complain about things rather than try to do something positive. You can only watch stocks go up for so long before not getting in is just plain stupid. Get on the bus or shut up. Jealousy an excuse making is no way to go through life. Especially in regards to investing your money. The definition of insanity is continuing to do something repeatedly that you know is wrong. Learn to take responsibility for your actions not the actions of others. Put your money where it will make some money. Stop whining!
Long since 2003. I sold six figures worth of AAPL yesterday, just in case $500 didn’t hold. The last big buy was July 1 2013 at$402. And you finally jumped on the bandwagon when? Pack it I you ear, Mr. “Investor”.
I am not that Paul. Will post in future as another name.
Bullshit . I have a fortune in apple for years and cook is full of shits leaving investors money dead!!!2014 is again dead until the fall. Throw the bum and his bullshit out!!!!!
You are welcome to sell your stock at any time if you don’t like what management is doing. Carl Icahn can do the same.
May we should throw you and your BS out. If you are hanging onto Apple stock, yet not happy with it, the problem is yours and yours alone.
If you are investing ’emotionally’ cause Apple Inc name is attached, you are an idiot. Apple Inc ≠ AAPL Over the last 20 years Wallstreet has proven that their stock price perception has very little if anything to do with Apple Inc, its products, and the mere mortal everyday people who buy use and enjoy them
A refreshed iPod Touch could’ve owned the data-only/voLTE market, without eating into regular phones.
I remember at one time the iPod Touch was being pushed as some gaming machine but Apple just let it molder without even cranking it up to A7 specs. Are A7 chips that precious to Apple’s top iPhone that there’s not enough to go around?
I’m just clueless and confused because nothing makes much sense to me of how Apple operates. If Tim Cook would just sit down and explain some things I wouldn’t feel so frustrated. The iPod line just seem to be in some state of limbo or maybe just an afterthought for Apple.
We understand how clueless and confused you are.
… says the asshole who never has anything relevant to the conversation.
MDN notes “Apple sells premium products at premium prices to premium customers.”, but fails to mention the logical follow-on which Tim Cook & the mktg execs know…
These customers are the people who have the disposable income to buy additional Apple lifestyle products & use their payment system that Apple is obviously aiming for. Why? Last I heard Apple had roughly 600 million credit card #s registered !!
best ever activation, unbelievable, new product category……etc
I think TC pipe is clogged? underestimate TC? what’s new.
time to show something, Cook some new dish or move to desserts.
So investors want steak, while Tim is producing milk. So investors are pissed off, even though the milk Tim produces is so sweet and unparalleled.
Schizophrenic barely does it justice.
I’m an investor and I’m not infuriated. I believe in Apple’s goal and vision. It doesn’t fit Whore Street, but that’s not the point from where I see it.
It’s Whore Street that gets infuriated, as it should be. Those who are at peace with their goals often infuriate those who are not.
Shareholders can vote Tim out if they don’t like what he’s doing. Last year he garnered better than 99% support. The next meeting is February 28.
You bet shareholders like me can vote him out, and that’s just not going to happen. He gets my vote to stay on.
Yes MDN. But, if Apple continues to delay and not engage with products, services, advertising, open up AppleTV to developers, … they are killing our 401Ks and hopes. I am almost all AAPL and will have to start diversifying (as I should have) because I do not have years to sit on the side because Apple chooses not to engage yet. “Be patient”. I have been and they are wearing me out. I know why I own AAPL and Apple products. I wish Tim and the board could explain why I should stay! We can come back when they choose to engage. I would rather they say nothing about the next big thing like Steve Jobs did until it was ready. Steve did not do this to investors. Vapor ware products is a Microsoft game!
I often wonder what the size of Apple’s product development team is. I get the impression that it’s made up of about 25 people all sharing time on different projects and all of them totally stressed out making revision after revision. I don’t have a clue what it takes to turn out products at that level but it takes so long for Apple to turn out one product, I really have to wonder. A company that can build a marvel product like an iPhone and yet a product like AppleTV takes forever to update.
I’m not really angry at Apple but I must admit I’m totally baffled by how the company operates at what seems such a leisurely pace compared to other companies. Maybe refining a product take longer than I realize. Compared to most tech companies, Apple has a relatively small product lineup and yet with so many resources at its disposal many product shipments keep getting delivery dates pushed back. (which still may be a good thing).
I’m not panicking because I know the potential is there and share price drop or not, Apple definitely doesn’t seem to be struggling. It merely seems to be coasting and since I’m impatient for results I find it somewhat frustrating that Apple is now considered a slacker company.
Apple’s shareholder meetings are open-mike sessions where Tim Cook and his staff field questions from shareholders.
If you attended one, I’m almost certain you would be scared shitless to ask one of your questions or repeat what you’ve written in your comment.
Jersey trader: Apple continues to delay and not engage with products, services, advertising, open up AppleTV to developers, … they are killing our 401Ks and hopes.
Tim Cook: Uh, I don’t know how to respond to that. Security?
Couldn’t agree more. I’ve been on here begging for a larger screen since the time MDN was endorsing the dumb decision not to offer one because Steve jobs said the iPhone size was just right. Even MDN has flip flopped on this stance. Hopefully apple delivers this year with larger screens.
I agree that different customers want different screen sizes.
Toyota learned this a LONG time ago. Young, 20s dashboard UI designers were required to get in mockups of cars with glasses smeared with Vasoline and required to accurately use the controls.
I have excellent corrected vision, but without reading glasses, I can’t read the text below the 5s icons on the home screen.
Nobody really knows what Cook intends to do, but the trend seems to have developed:
– Apple’s pile of cash has attracted unwanted attention
– Cook has not found meaningful ways to spend that cash for company growth, new product introduction, more in-house manufacturing, or other Apple-strengthening moves.
– Apple’s stock buyback program proves that Wall Street has at least some influence over Apple’s strategic decision making, which is always bad news.
– New product introductions have not been quite as numerous nor as well communicated to the general public.
– Apple has more product lines than it has in a long time, but it hosts a new product release event only a couple times a year, leaving way too much time for FUD to build up between announcements.
– Apple is being rated on its performance compared to potential, and it really isn’t hitting on all cylinders. For example, in its current iteration AppleTV remains a locked down add-on that offers relatively little value compared to any other set-top box.
– Finally, the incessant complaints about iOS7 aren’t coming from just a few people. Face it, the GUI is a flop. Apple needs to turn the page with something more intuitive and realistic, with more skeu and/or more user control over appearance, colors, and fonts at least.
– As I repeat over and over, the MacRumors Buyer’s Guide tells everyone when Apple products have become stale. Under Cook, therre have always been way too many stale products. A company with Apple’s resources has no excuse to be so slow about its updates. Haswell in the mini, anyone? 4K displays? software optimized for multithreading? real server solutions for business customers? so much to do, and Cook can’t seem to communicate to his customers what’s in that skinny pipeline of his.
Although many of your observations contain a grain of truth, they pale in comparison to the millions disappointments logged by Apple’s competitors, especially Google.
Are you joking. Google is considered the perfect company by Wall Street’s standards and you’re saying they’re making mistakes. C’mon, be reasonable. Every article I’ve read lately says Apple is the premiere company of disappointments. They disappoint the smartphone industry pundits, they disappoint Wall Street and they disappoint shareholders. Apple disappoints everyone except Tim Cook and the few remaining loyal customers.
Google and Amazon please everyone, and I mean everyone. Everything those companies do are pluperfect. Why can’t Apple manage to do just a little bit more than it has? Because Tim Cook doesn’t want to spend any reserve cash due to fear his personal piggy bank will deflate. It’s just so frustrating.
“Apple disappoints everyone except Tim Cook and the few remaining loyal customers.”
Yeah it was that way under Steve Jobs. You probably don’t remember him, he died before you got here.
For the last thirty-five years I’ve head every insult regarding a dying Apple and now a new generation of doubters have invaded Apple once again.
People like you, who’s first introduction to Apple was iPod or iPhone, don’t know shit about Apple. Like wall street, you apply the same inert logic to define Apple used for the last 38-years
The reason most other companies are not graded so severely as Apple is that Apple has long positioned itself as relatively more expensive and refined than the competition. If you want to be the premium product in electronics, however, it usually also means that you have to roll out product updates faster than Cook has done. Valuation of AAPL reflects lack of trust in Cook’s long, slow pipeline. Customers and investors only have a limited amount of patience, and most people don’t worship Apple like the usual suspects here. If the average person wants a 5″ screen phone, then they’re going to evaluate all 5″ screen phones. Apple removed itself from the selection by not even showing up. Cook has one year to show up, or else calls for his head from investors will only increase.
“you have to roll out product updates faster than Cook has done.”
Apple doesn’t follow the press’s calendar. They roll things out in their own time.
“Cook has one year to show up, or else calls for his head from investors will only increase.”
You aren’t waiting a year are you? You’re bashing now.
Please point out where I was “bashing”. It’s been two years since larger screen phones were available. Two years since Apple TV was updated. Two years since iPods received significant refreshes. It is not wrong to say Apple needs to make updates pronto. Preferably, Apple should release them when they are ready, several times per year, rather than scheduling two events per year and forgetting to even mention other important products like Airports. If my position is unreasonable, then how come the vast majority of the pro-Apple press seems to agree? NOBODY is saying Apple’s product range is fine and needs no updates. EVERYONE wants more choice. Forgive me for speaking the obvious.
Your attitude towards Apple is typical of PC converts.
Microsoft has ruined you.
Some? You mean all of those sleezebags at WallStreet and their army of coattail riders.
“Some investors would rather ride the Apple stock for all its worth, cash in, watch Apple fail, then move on to the next growth opportunity. CEO Tim Cook, being a good steward, isn’t interested in that scenario.”
Yeeeeesssssssss!
apple is not going to deliver a heavy phone with poor battery life to fight the screen size war. when apple goes big with the iPhone it is going to be impossibly thin.
….and for many, impossibly late. I gave up and got a Moto X.
And guess what – it doesn’t crash, it’s never been attacked, the ecosystem works pretty well, Google+ not only archives all my full-res photos, it assembles the burst shots into GIF’s and various video footage shot within a certain period of time into edited movies with sound tracks (not perfect, but zero effort) – and has more useful apps than you can shake a stick at.
All things I never would have found out if the Ivian Aesthetic didn’t rule everything at Apple.
oh, and I thought I was buying shares in the 400-500 range based on the fact that apple is gearing up for the delivery of 4K content and 4K TV domination of the high end market. I AM NOT investing in Apple Phone – I am investing in the future of tech.
Look at Apple then look at the rest of the stock market this Thursday. Every freaking stock is soaring except Apple. What a pathetic stock performance from a profitable company. No investor in their right mind should put a dime into this company. Tim Cook is absolutely incompetent when it comes to generating investor interest in Apple. It almost looks as though Apple is deliberately trying to ruin shareholders. (I know they’re not but it does look that way).
This statement is highly misleading.
All that Apple would do by releasing discount iPhones is *temporarily* ramp up the growth rate of iPhone unit sales. All growth has limits, and Apple would just saturate the global market more quickly than is currently the case. In addition, most of the reduction in iPhone sales price would be taken out of profits. So the total profit that Apple will ultimately accrue from iPhone sales would likely be lower in the discount iPhone scenario than in the current Apple strategy.
Why rush to saturate a market with low-priced units when you can satisfy demand more slowly, starting with higher priced units and gradually ramping down prices as driven by competition, market share considerations, etc.? The only people that this would benefit are the short term speculators and manipulators like Icahn and Trumphole.
Apple does not need to “dominate” the smartphone market in order to maintain a robust and vibrant iOS ecosystem. It just needs to satisfy its profitable segment and gradually evolve with its customers.
There’s a lot of anger in this thread lol