Bob Lefsetz on Apple-Beats deal: Tim Cook is an operations guy, he’s clueless, and the company has no vision

“You’d think something important had happened,” Bob Lefsetz writes for The Lefsetz Letter regarding the impending Apple purhcase of Beats Electronics for $3.2 billion. “The overanalysis is mind-boggling. Tim Cook is an operations guy, he’s clueless, the company has no vision and this is evidence of it. Steve Jobs was famous for saying one thing and doing another, decrying this and then doing exactly that. Anybody with a brain knew that streaming was eclipsing downloads. Except at Apple, where they were adhering to Jobs’s philosophy. But it turns out Apple had no Plan B, no streaming service ready to be launched when necessary. It’s like they never read Clayton Christensen’s ‘Innovator’s Dilemma,’ despite it being vaunted in the tech press for over a decade. If you rest on your laurels, you’re gonna be history tomorrow.”

“Yes, this is about music streaming. Do you really think Apple wants to own a headphone company, one built upon fashion? Yes, Angela Ahrendts will figure out a way to sell more Beats headphones, she’s a marketing guru, but that’s the problem with Apple today, it’s all marketing and no innovation/vision,” Lefsetz writes. “Apple still won’t own music streaming.”

“We no longer live in an Apple world. Apple dominated music because of the seamless interface of the iPod and iTunes, with the iTunes Store the glue holding it all together. Apple no longer has a market monopoly, and the company is too stupid to strive for this. End game with the iPhone is death (or a niche product with declining software, which IS death),” Lefsetz writes. “We’ve seen this movie a zillion times before, most famously with the Macintosh. Apple triumphed in this century by dominating, first with the iPod, then with the iPhone and then with the iPad. As that dominance erodes, you come up with a new dominant product, one that hopefully ties all your others together, so far Tim Cook has failed to do this.”

“If Jimmy Iovine goes to Apple, more power to him. But that will indicate the lunatics have taken over the asylum, Apple should first and foremost be about tech, Jimmy is at best a marketer. This would mean Apple is mature, and you know what happens with mature tech companies,” Lefsetz writes. “Jimmy has created nothing other than wealth. The headphones are mediocre and Beats Music is a me-too service. There’s no story here. Other than a desperate company making a deal with someone with something they need.”

“Who will carry the mantle of Steve Jobs? Certainly not Cook and Ive, possibly no one. But Jobs knew how to market, better than anyone, although Iovine is somewhat close. And Jobs knew timing was everything, to jump in when the public was ready. And Jobs knew you had to constantly innovate, but take few chances. That’s what’s bugging the analysts, that this is the chance Cook took. But they’re not looking deep enough, the guy just doesn’t get it! He’s an operations freak. That’s like asking the studio booker to make the record!” Lefsetz writes. “Creative companies must be run by creative people, never forget that… Success is about vision, not raw talent, Steve Wozniak was the tech genius of the Apple II, but without Steve Jobs, he was nowhere. It appears that without Steve Jobs, Apple is nowhere.”

Tons more, including mention of Van Halen vs. Van Hagar, in the full article – recommended for the writing and some of the ideashere.

MacDailyNews Take: There’s much more in the full article (really, it’s a list); some of it right*, some of it close**, some of it not so much***, and some of it completely wrong****. (And not a word about Eddy Cue, whose failure to execute – subpar iTunes Radio, music subscriptions or lack thereof, no major content deals for Apple’s “iTV” – is very likely the impetus for this deal in the first place).

We repeat, with utmost confidence: Those who underestimate Tim Cook’s Apple do so at their own risk.

You haven’t seen anything, yet!

*”Apple didn’t want the headphones. They wanted the streaming music service. Jimmy insisted upon selling the whole thing.”

**”People will forget about this story in a matter of weeks.”

***”Beats ‘curation’ was a marketing smoke screen, a dollop of fluff made to make the company look attractive.”

****”Tim Cook is an operations guy, he’s clueless, the company has no vision.”

Related articles:
Apple CEO Tim Cook makes break from managerial style of Steve Jobs – May 12, 2014
Analyst Sacconaghi on Apple buying Beats: ‘We struggle with the rationale for this deal’ – May 12, 2014
Cody Willard: Apple’s Beats buy is just stupid
– May 12, 2014
Apple may unveil Jimmy Iovine, Dr. Dre executive appointments at WWDC – May 12, 2014
Apple CEO Tim Cook’s pursuit of Beats seen presaging more takeovers – May 12, 2014
Former eMusic CEO explains why Apple wants to buy Beats – May 12, 2014
Apple’s deep ties with Jimmy Iovine key driver of Beats deal – May 12, 2014
Removal of Dr. Dre video about Apple-Beats deal likely means acquisition is real and imminent – May 10, 2014
Game changer: Apple buying Beats could radically transform the digital music business – May 9, 2014
If Beats deal happens, Apple is acquiring a fad, not quality, and that is troubling – May 9, 2014
If Apple’s really buying Beats, here’s hoping it’s brilliant in a way which isn’t immediately obvious – May 9, 2014
The reason for Apple’s $3.2 billion interest in Beats? Spotify – May 9, 2014
Apple buying Beats Electronics: Its best idea since the iPad? – May 9, 2014
Why would Apple want to blow $3.2 billion on Beats Electronics? – May 8, 2014
Apple in talks to buy Beats Electronics for $3.2 billion – May 8, 2014


    1. The writer has some good points. Come on guys, I know you’re all fanboys but let’s stop here and look at reality. When was the last Keynote? We now no longer have the iPad event in March. Apple’s marketing is completely inconsistent. from those cheesey Christmas ads to the “You’re more powerful than you think.” It’s like they can’t stick to anything for very long because of a lack of solid direction from the top.

      Then there’s iPods: all but forgotten with crap sales. They got no upgrade/refresh last year. I think there’s still a place for a few fresh models. What about declining iPad sales? I like the thinness and lightness of the iPad, but iPad hasn’t evolved. It’s still a giant iPod Touch. No widgets for instance. MS Surface has its issues, but its integrated stand and backlit keyboard cover showed what was possible for productivity on a tablet.

      Where are the Retina MacBook Airs? We are now well past the due date where all of Apple’s laptops should be Retina. Where’s the Apple TV? The real one? What about iOS 7? I’ve watched older people get frustrated with using the iPad because user interface elements are harder to see and in some cases too small to reliably touch. And they keep changing the UI with minor updates!

      I could go on. What we have is a company that’s giving a lot of cash back to investors and one that is on a perpetual minor upgrade kick.

      Now the Beats Audio thing. I watched that video of Dr Dre partying with his buddies, arrogantly gloating about being rich. I find this very concerning.

      Apple has become much less about innovation and vision and more about money and marketing.

        1. This is what all you fanboys miss. Tim Cook has been riding on the coat-tails of Jobs. But that time is running out. Tim Cook never founded Apple. He inherited Steve Jobs’s vision that has a 30 year foundation.

          From Jobs’s bio, it’s clear he was going to get an Apple TV on the market and reinvent that market. Tim Cook hasn’t realized that initiative. This is important because it’s a new product category that hasn’t been released. Yes, Apple has a set top box but what Jobs was referring to was the full package. Apps as channels. SDK. Gaming. 4k TV. Etc.

          Is there still time for Cook to come through? Yes, but all he’s demonstrated is minor updates to products and a complete slowdown in innovation. It’s money and marketing and gay rights now.

      1. Google made 3.5 Billion last quarter
        Amazon made 108 million (with a ‘m’)
        netflix made 53 million (with a ‘m’)

        Tim Cook’s Apple made 10.2 BILLION
        i.e over TEN THOUSAND million (or equal to 100 Amazons)!

        Yep, fire the guy who makes you 10 billion every three months. LOL.

        1. A rhesus monkey could babysit Apple!

          That’s all Tim Cook is, a babysitter who watches your kid and paints his toenails on your couch, while eating your food, and yes… Tim Cook sneaks his boyfriend into the backdoor as soon as you leave.


  1. Too many unknowns and to comment in some respects is like fools rushing in where Angels fear to tread. I do have some faith that there is a great reason for the Beats acquisition until proven otherwise as a Beat-off dumb idea. Time will tell. Inevitably as Apple gets most things right a few things might not go as well as planned.

  2. I’ll keep saying this; I’m pretty sure Apple want the headphone side for their own purposes, not to sell fashionable Beats ‘phones, although those will sell well. Apple don’t have their own Audio hardware, unlike Sony, so this will give them another hardware range they can market as Apple devices, tuned to a different audio market.
    Iovine and the streaming side obviously have a lot of appeal to Apple, but those who continue to whine about Beats ‘phones being a ‘fad’ ignore the fact that bass-heavy dance/rap/electronica has been around for over twenty years, and hasn’t died off yet.

        1. If Apple intend to expand peripheral products and accessories for existing, but more importantly new products that demand an add on ecosystem then far better to have a brand that fits that development than trying to water down the Apple brand with endless products that was precisely the sort of move that devalued, for example the once great Sony brand and why Samsung will never have the cache that Apple does.

          Apple has to expand into non core areas to expand otherwise it will have to take swings at ‘new products’ and hope they come off just to stop the idiot analysts from going on about them not being innovative any more. Because do so for the sake of it and get it wrong these very same analysts will circle like vultures, rather than pigeons as they do now.

  3. I tend to agree with this article. My Apple experience is waning this past couple of years. I’m disappointed in iTunes and iCloud. iOS 7 needs some love too. Still a little better than the Windows world but not by very much.

  4. Most of these sort of articles seem to work on the idea that the CEO does everything at a company.
    It mentions that Jimmy Iovine is at best a marketer, in that case, if he goes to Apple maybe he’ll have a role linked to, you know, marketing! Apple are hardly likely to put him in charge of new product development.

    It strikes me that Apple has made a lot of smaller purchases relating to mapping, primarily because doing it all on their own would mean never catching up. Any larger purchases likely weren’t possible. These smaller purchases, perhaps wouldn’t add up to the same size as this would be, but at the same time, music is a much more definitive revenue stream (currently) than mapping, so larger expenditure is perhaps more justified.

    The comment about iOS 7 eating battery life is garbage, it’s no worse than previous versions have been at times. Unless I’m watching a lot of video, gaming, or using GPS all day (which I rarely do at work) I rarely need to top up my battery, and even then I typically have 20-40% by the time I get home 10-11 hours after unplugging in the morning. To say that battery life is worse since Steve Jobs left is stupid.
    I may be wrong, but i don’t think Spotify is making any real money, so why is it seen as some massive success that is going to doom iTunes? This is not to say Apple don’t need to improve streaming, but I don’t think any one service has got it right yet in the same way that iTunes did with selling music.

    1. Spotify is destroying Pandora and iTunes radio in both subscribers and ‘active listeners’. That’s why it’s seen as success. People like the ‘all you can eat’ model much more than the ‘let some service choose what you want to hear next and there is nothing you can do to not listen to this song you may not like’ model.

  5. For once, I’d like to see someone approached on this topic say something like “You know what? This Beats thing was sourced by 2 assholes at the Financial Times and has been piled on by everyone since. I’ll wait until something that resembles a press release comes out, thanks.” The speculation about this deal is beyond ridiculous – and this is the tech press we’re talking about. They jump the Apple shark every other day.

      1. I had to laugh at the bit that says Apple can’t replace the arch Marketeer SJ then slams Iovine as nothing but a marketeer, yet without a whiff of irony, one almost as good as Jobs which he claims apparently Apple lacks and is thus doomed. Hell which is it. This going around in circles its making my head spin.

        Fact is idiots like this wrote off SJ when he was alive as simply a showman, but now seem to build him as an irreplaceable genius now he is dead. When you read garbage like that you know the write hasn’t a jot of objectivity in his/her head.

  6. “Apple no longer has a market monopoly, and the company is too stupid to strive for this. End game with the iPhone is death (or a niche product with declining software, which IS death)…We’ve seen this movie a zillion times before, most famously with the Macintosh.”

    LOL. The whole Beats story is so fun because pundits/bloggers/etc just can’t write a negative story, they have to go so hyperbolic that the blood drains from their head and they write gibberish. iPhone/iTunes/Apple are only relevant if they have a monopoly?!?! Apple’s non-monopoly position in smartphones is working pretty well for them. Anyone that thinks the smartphones/iOS game is played the same way as computer OS is not paying the slightest bit of attention. Apple needs sufficient marketshare and profit to attract quality developers to write software. Their profitshare more than justifies that. Apple is in music NOT to dominate, but to provide that service within their ecosystem. They don’t have to dominate, they don’t have to make a huge profit from that source, they don’t have to attract new customers with that particular part of the service. If you think that Apple is has the same motives as Spotify or Rdio, you really need to stop writing about tech. Spotify and Rdio need to make profit from music streaming. Apple needs to have a quality music streaming service within their ecosystem so that they can make profits from smartphones, tablets, computers, app related revenue, iAd, etc.

    Should Apple have gotten into streaming earlier? Not having it certainly has not been crushing their smartphone and tablet sales. It needs to happen sooner, rather than later, but it is hardly the Defcon 1 that some tech pundits believe. They’re heard about the iceberg, but still aren’t in visual range.

    I also love this whole operations guy/has no vision thing. Another example of the bluster common in the Beats “analysis” stories. True, Tim Cook is an operations guy. It may be true he is clueless and has vision. But an operations guy is not inherently clueless or without vision. This sort of non-sequitur argumentation is the standard in these stories.

  7. Apple isn’t perfect, but c’mon folks — do you really think they don’t have the resources, engineers and vision to create a really good streaming experience?

    Whether it be iTunes streaming service or some Apple-branded HDTV with a really simple interface, I really believe Cupertino’s problem has been that the content-creators are doing everything they can to avoid having one company with so much power.

    Perhaps Apple sees this deal — and the people it would absorb — as the key to the doors they need to open.

    If not, it is indeed a head-scratcher. Ive can still design, the engineers can still code and Tim Cook is still the guy who can pull it all together so that millions of devices can hit the supply chain as demand requires. But never underestimate how key Jobs’ ability to negotiate was to the world we live in today (think iTunes gathering labels or Cingular caving in a thousand ways on a device they hadn’t even seen yet).

    Jobs was able to do a lot of things right. In his absence, separate people’s talents have to come together to fill the immense void left by his death. I don’t know if Jimmy and Dre are the answer, but if the former can convince the content-owners and the latter can be a trusted liaison to the artists it might just be a few billion well spent.

    1. With Dre involved these content negotiations will be “heating up”. Dre – “Before we get started I would like to show you this new gun my posse gave me. Isn’t it big and powerful? Also, I think your girlfriend is a sexy bitch. Tell her to put on a bikini for me. Now, here are the terms of the deal…”

  8. first of all who says the studio booker CAN’T make a record who says lynrd skynrd’s roadie can’t play piano !
    I personally have enough monthly bills and don’t want to fork over cash for the rest of MY life to hear my favorite artists. I like to own my files and as of yesterday it would take a couple of years at 10 hours a day just to go through my collection once . I don’t need to listen to a bunch of auto tuned zombies that can’t hold a note in a bucket sining self centered crap about what they want out of the next five minutes of their pathetic slave to brand names selfish little lives. If Cook sees a quick way to satisfy that portion of the market fine ! if i need a board i don’t build a lumber mill i buy a board. Cook used about a days sales to buy this thing .before you knock it lets see wether he actually does it and what he does with it

    “now that you’ve found another key …what are you going to play ”

    the Beatles

  9. I just had a thought, what if Apple is buying Beats so they can set up a record label?

    They can’t do that under the Apple name because, IIRC, they settled with Apple Corp. and one of the stipulations was that they don’t compete as a label. So what better way to get round this than to buy a company with two music giants and create a label that way?

  10. Saying Tim Cook is clueless is like saying Steve Balmer is a genius. No facts, all FUD! All of these writers are writing about stuff yet they don’t know where Apple is in the whole scheme of things. If this deal is done there is a great purpose for it.
    But writing with only speculation and here say and to come to conclusions without knowing the where, why, what, and so on that Apple knows is dumb. It’s not Tim Cook who is clueless, it is all these writers who don’t know what Tim Cook knows that are clueless and he likes it that way.

  11. I like that iTunes match has fire and thief proofed most of my cd collection for $25 a year. I’m prob. not the target for new music because a lot of it has a suck problem, but if I were, $14.99 a month for the BEATS family plan from AT&T puts a dent in iTunes sales for the entire family. Then it is played on a HP PC with Beats in it and in the chrysler on a beats audio system. A whole alternate vertically integrated ecosystem to iTunes with negotiated partnerships… hardware, software, in the car, in the PC, etc. sounds a lot like Apple. Lefsetz can’t connect the dots.

  12. And how much profit has Apple booked in the last 2 1/2 years ,since TC took the reigns It has something to do with product, but it also has to do with the supply chain which TC developed. The answer is over $100 Billion. And that is some kind of failure? Give me a break.

  13. VOMIT IN AISLE 12! Cleanup please!

    Much as I appreciate this guy pointing out the
    e c h o ) ) )
    c h a m b e r ) ) )
    o f ) ) )
    h y p e ) ) )
    about Beat, what i blowhard otherwise. This is just hit whoring. This guy took some BAD DRUGS and could NOT stop puking…

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