How Apple CEO Tim Cook infuriates investors

“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.]

63 Comments

    1. ….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.

  1. 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.

  2. 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).

  3. This statement is highly misleading.

    “That means that, unfettered by realistic competition, Apple can grow exponentially.”

    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.

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