Apple’s major problem is Tim Cook

“Yes, I have heard all the good guys (long only crowd) make excuses for Apple’s terrible performance this year to date,” Jay Somaney writes for Forbes. “Yes, Tim Cook and Eddy Cue and Jony Ive said that this is Apple’s year like they said last year was and the year before (all the while selling tens of million in stock options, if not hundreds of millions). Yes, wait until next year for an Apple TV set (now forgotten). Yes, wait until a few years for the iCar.”

“So what do Jeff Bezos, Mark Zuckerberg, Larry Page & Sergey Brin have that Tim Cook does not?” Somaney writes. “All the guys are absolute tech geniuses, including Tim Cook, but with one exception: Tim Cook is not a Wall Street-friendly CEO and does not and can not impress Wall Street.”

“Look, Tim Cook might be an absolute Mahatma Gandhi of a human being but he does not seem to be the right person to lead the biggest and one of the most technological savvy companies in the world. Can you imagine where Apple would be were it not for the biggest share buyback in corporate history?” Somaney writes. “I shudder to think.

“So, until things change at Apple or Tim Cook changes or shows us something meaningful or maybe makes a meaningful Wall Street-savvy hire, share performance of the biggest and probably one of the top global brands in the world more than likely could/will continue to underperform. Meanwhile Tim Cook and company will continue cashing in their tens of millions and hundreds of million worth of options that get vested and we shareholders will continue to stand by and watch passively,” Somaney writes. “Well, yours truly has chosen not to stand by nor watch passively.”

Read more in the full article here.

MacDailyNews Take: So, Somaney’s article is all about Apple’s stock being stuck/mired, as it were, not about two real issues that Tim Cook should really consider:

1. A continuing string of obviously botched product launches (outlined here).
2. Looking like you’re more concerned about anything other than correcting a continuing string of botched product launches.

You can traipse about the globe, issue open letters, and show up on TV shows promoting what should be personal issues in the name of Apple Inc. if, an only if, Apple Inc. is performing optimally. When you have no iMacs for Christmas, no iPad 2 units for months after launch, no Apple Watches for even longer (that greatly diminishes pent-up enthusiasm from potential customer excited to buy the product), release Maps that immediately become comic strip fodder, serve up half-baked Apple TVs without even compatibility with your own Remote app, release iPad Pro without having its Apple Pencil or its uninspired, poorly-reviewed so-called “Smart” Keyboard available for over a month, etc. then every single time you climb atop what some might see as your sanctimonious soapbox flying the Apple flag, your commitment to your actual job will be questioned. Cook sets himself up for blowback.

My job is to say when something sucks rather than sugarcoat it. – Steve Jobs

Cook can promote his personal issues and likely even get away with doing it as “Apple Inc.,” but only when Apple can execute product launches properly with (1) products that are more fully realized, tested, and worthy of the Apple logo and (2) adequate supplies to satisfy at least some significant portion of demand. Beta-esque devices and a bunch of promises just don’t cut it.

Quality is much better than quantity. One home run is much better than two doubles. — Steve Jobs

We believe that Steve Jobs spent an extraordinary amount of time with each product, actually using them, identifying problems in usability and having them addressed. We believe Jobs certainly would have, for one example, tried to open and set up an Apple TV from scratch himself, at home, and found the username/password input lacking and immediately turned to his iPhone or iPad to run the Remote app, so he could have access to a real keyboard. When he found Apple’s Remote app did not work with the new Apple TV, he’d ask the person responsible (likely at 2 am, intentionally), “why the fsck not?” Then the app would be coded and tested and ready to go along with the Apple TV release. Certainly the ability to pair a Bluetooth keyboard would be there at launch as well.

With Tim Cook, we get the feeling that he was too busy doing other things to bother really testing the Apple TV beyond what Apple employees had set up for him to quickly try out. Of course a pre-setup Apple TV would seem acceptable for launch to Cook. There’d be no text to input. Voila, “it just works!” And, of course Apple employees would set up the Apple TV to look/work as best as possible when showing the boss their work. Who wouldn’t? So, how would Cook know that Apple TV needed more polishing before it was worthy of release unless he took the time to do what we believe Jobs would have done?

Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected. — Steve Jobs

As far as AAPL stock goes, Wall Street is unpredictable, however a CEO who is perceived as if he cares about anything more than correcting a continuing string of botched, half-assed product launches is simply not a recipe for a rising share price.

Bottom Line: Tim Cook is generally an excellent CEO. One of, if not the best, CEO in the world! His job is massive and thankless. He’s got an impossible act to follow. He just needs to make sure, himself, personally, that the products are working well and that they are ready to go for launch with even marginally adequate supply. If he does that, he’ll have the leeway, indeed the privilege, to use the Apple brand to promote pretty much any cause he desires.

If you keep your eye on the profit, you’re going to skimp on the product. But if you focus on making really great products, then the profits will follow. — Steve Jobs

 

SEE ALSO:
At Apple, it seems as if no one’s minding the store – November 13, 2015
Publishers underwhelmed with Apple News app – November 13, 2015
Apple’s joyless iPad Pro launch: WTF are the Apple Pencils and Smart Keyboards? (4-5 weeks away) – November 12, 2015
Apple’s best days are behind it or something – November 7, 2015
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Apple Watch has arrived for just 22 percent of preorder customers – April 28, 2015
Open letter to Tim Cook: Apple needs to do better – January 5, 2015
Tim Cook’s mea culpa: iMac launch should have been postponed – April 24, 2013
Tim Cook open letter: We fell short with new Maps app; we are extremely sorry – September 28, 2012
With obtuse iPad 2 launch, Apple fails to delight 49,000 customers per day – March 21, 2011

[Attribution: Drudge Report. Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

98 Comments

  1. What really surprises me is how much money Apple has spent on share buybacks that should, theoretically, increase the price of shares. And they don’t seem to have had any effect. So Apple’s just burning money. That doesn’t seem like a savvy choice by a CEO.

      1. Double the dividend and eliminate buybacks which are a waste. If investor’s can’t see how strong Apple is in comparison to Amazon, Google, or Netflix over the long term well it’s their problem. Long since 2005.

        1. If you bought AAPL for dividends of a couple of percent and think that doubling them to just over 3% is a good deal then you have no idea about investing and should put your money into municipal bonds and get out of the market. You are not even keeping up with inflation!

          1. So doubling my annual Apple dividend from $20,000 to $40,000 would be bad for me? No, I can’t sell it because capital gains tax would take 80%. I bought AAPL at $6, seven splits ago.

          2. Yeah, I’m not so lucky as these other guys (though I had Apple pre 2001 crash – had to sell). But I bought in at 55 – 85 and 120 pre split – so average cost is $86 presplit – or $12 post split. The dividend is just a bonus that happened along. And I’m happy. It is significant $ per year, and I’m hoping to doubles by the time I retire,

            I agree – forget the buybacks. Return all the FCF back as dividends!

      2. I’d have felt better if Apple had added that $140 billion worth of cash spent on buybacks to Apple’s current $205 billion stash. At this point it appears the $140 billion is gone and Apple has nothing to show for it. I wouldn’t have cared if Apple spent a good portion of that $140 billion on goodwill projects in the U.S.. At least Apple might have gotten some good press out if it. What’s done is done and nothing is going to change. What ifs and could haves are useless to think about.

        1. I second that. Apple could open classes for youths in the ghettos and communities for poor and underpriviligied, keeping them off the streets and doing something to promote their future. Their are brains there goin to waste that we don’t know what great achoevements they could accomplish. For Apple it would amount to peanuts and only the goodwill would be enormous.

    1. I’ve been saying for years that Tim Cook is an incompetent who has absolutely no business running Apple.

      His sexual orientation has nothing to do with it either, and the only reason we discuss it is because HE drug it into the public forum.

      In fact, some people may now hate gays just because of him!

      Rarely does an incompetent, mistake prone, CEO leading a large company come around who completely f*cks up every single thing he touches. It happended at Microsoft first and unfortunately it has now struck Apple.

      They should have fired this guy 3-years ago!

      All we can do now is bury our heads in the sand and wait for more carnage.

      1. “With Tim Cook, we get the feeling that he was too busy doing other things…”

        Did anyone replace Tim Cook when he replaced Steve Jobs. Maybe that’s the problem. He’s too busy.

    2. It would likely be much worse without the buybacks.

      Cook needs to get off his “sanctimonious soapbox.” That’s not his job. He needs to focus on doing his actual job. You don’t launch a product as important as Apple Watch with no supply. You don’t launch a product as important as iPad Pro without its stylus and keyboard. You don’t launch Apple TV without even having your Remote app compatible. These are all obvious, amateurish screwups that Jobs’ Apple would have never allowed to happen.

      1. Oh, I forgot about Antennagate. Was that Cook? No. After every product launch there are things Apple learns to do better and does. Keeping secrets causes supply issues, but I like the surprises. I look forward to getting an iPad Pro when they are easily available.

      2. Personally I didn’t know it is such a big deal that there is not enough of the product to go around.
        Personally I feel that the quality of the product is more important and can you fault the AppleWatch or the Pencil, etc.
        if there is a drop in the quality and the user friendliness then I worry for Apple.
        Mmmm, perhaps I am not a perfectionist but I do appreciate well made products that seem to last forever.
        As I mentioned in many blog if you can do better why not write to the board and offer your ideas and then replace Tim Cook.
        Btw words are cheap and on hindsight one’s vision is always perfect.

    3. 1) Buy backs are never burned money: Your earnings per/share have gone up because of them.

      2) Buy backs don’t necessarily increase share price immediately: A buy back means you own MORE of the company but the company now has LESS cash. So the effect on stock price is not always immediate.

  2. Apple has to get their act together under Tim in the software side of products…

    Besides, who else in the tech offers such a integrated experience… Who?

    Little correction; “Apple terrible performance” must be translate into Apple’s best year ever… EVER!

    We are just Mac fans and zealots complaining about perfection…

    They are just paid ANAL-yst to overshadow the tech giant in order to make believe there are alternative…

  3. El Capitan is the first OS update that I’ve not installed ASAP since I began using Macs in 1996. I’m still reading about many, many problems with 10.11 that preclude me from installing it. Tim Cook should concentrate on “i” devices and let someone else handle desktops. I wouldn’t be sad if Mr. Cook left.

    1. My experience with El Capitan is that it’s better and more stable than Yosemite or Mavericks. If you want to find people who’ll complain about 10.11, I’m sure you can find them, just like with every other Apple OS or hardware product. Rather than make broad, sweeping criticisms, it’s better to write about specific issues. I can’t think of one bug / problem I’ve had with El Cap, and I’ve been running it since the first public beta.

        1. I respect your opinion, TM, so I’m curious as to what your Safari problems are. Although my mini has El C, I mostly use a ML partition so I haven’t noticed anything.

          My wife’s mini is running only El C and has had some Safari issues with a particular site she’s a member of. They re-did their site not long ago, and had some technical issue that caused a planned video conference to fail. Also, trying to get to the site on a iPad usually gets “site cannot load due to too many redirects” messages. I think they may have coding issues, but that’s just my non-techical opinion.

        1. WTF does that even mean? the “Mac feel’ that Mac oS has always had?

          Bought my first Mac in 1985. I’ve seen the Mac GUI and OS change countless times. It’s always had problems. It’s software. Don’t like it? Buy Windows.

    1. Oh, but Steve Jobs was “Wall St. friendly” precisely because he did what MDN describes. With Jobs, it was ALL ABOUT THE PRODUCT. Cook seems to care more about “global warming” and transvestites’ rights or whatever than about Apple’s products and, even worse, he promotes his personal agendas under the Apple brand that Steve Jobs built, while cheapening it with poor launches of unpolished products, software, and services.

    2. If you know what you are doing within your own company, Wall Street will be friendly to you because they want performance…..and so do your stockholders..so if Steve Jobs didn’t seem overly friendly to them, it really didn’t matter. I think if Steve were still there, warts and all, the stock would be higher and more customers would be happy. I know I would be since I make my living from OSX.

    3. mxnt41: So true about SJ’s WS friendliness. I’d even say, he really didn’t give a F. He had other things on his mind…remember he was consumed, maybe neurotically, about maximizing his time-to achieve something…to do/make the best. TC has an excellent biz mind, but he doesn’t have the Other part. He’d do well to leave his Mahatma Gandhi-ness at home. Whether it’s Apple size, which must be hard to control, or TC’s including his humanist tendencies as CEO, I don’t know, but there are and have been significant issues cracking Apple’s solidity.

  4. iOS is getting more and more complicated for “normal” users!!! Even I have been “Apple Fan” since the Macintosh SE in the early 80’s and had every iPhone since the first one, I am getting more and more busy helping friends and family to set up their iPhones and iPads because they just give up!!! It is not “Apple-like” any more, it just works no longer.
    There should be 2 versions of iOS (or two devisions of the set-up) One as it is now and one “easy setup” for newcomers and retired people) (I am 73 myself!)
    Best regards from Denmark
    Peter Glunz – http://www.applejuice.dk

  5. Or as I said years ago after Steve had been gone for a while, “it feels like no one is walking the halls at Apple, looking at products and saying this is a piece of shit.” It feels as if no one is actually using new products within Apple.

    Perhaps, after all is said and done, the quality that Apple is missing in it’s CEO is the one everyone seemed to dislike in Steve. I.e. his capacity for being a complete ass on occasion. I suspect no one is afraid to ride in an elevator with Tim.

    Apple seems desperate to do something, anything that can capture the imagination of the public. Make a watch, make a car. If the car doesn’t work what next? A personal helicopter?

    And Tim… Poor guy. One day he’s out asking why anyone would buy a personal computer, and the next he’s telling everyone that Apple will be making the conventional personal computer for the near future. That doesn’t sound like a man with a vision. Certainly not a tech genius.

  6. Stop the bullshit. While not perfect, Apple does a great job launching and selling products. As a long time (and quite well remunerated) AAPL stockholder, the worst drops have occurred under Steve Jobs second coming. No one in their right mind suggested that he be replaced again. The Value of AAPL has gone up and down, because Wall Street analysts are dumb as posts and know nothing about why Apple is different than other companies. Record quarters are rewarded by falling stock prices, fearing the record is the peak marking the end. A 200 billion dollar plus cash surplus is seen as a negative, not as the hedge against failure that it truly is. Stock buyback is a negative, because AAPL is running scared or something. Cook’s brilliant playing off of one supplier versus another is ignored, while clueless financial advisers not supply chain fluctuations. Day traders are pissed and whine that Apple is unpredictable and too too volatile.

      1. I’ve probably seen a dozen articles complaining about the Apple Keyboard and Pencil not being available for the iPad Pro upon launch. Everyone complained it was a big fail.

        On the other hand it was claimed the Surface Pro 4 was only available in limited configurations, but little was written about it by bloggers. Same goes for the bendability of the Next 6P smartphone. It also bends but there’s no outcries reaching iPhone Bendgate proportions.

        Apple seems to garner a lot of bad publicity. Maybe Apple is expected to be perfect and anything less is considered failure.

    1. Michael, talking about stock price as it relates to CEO isn’t always pertinent…see Amazon. The issue related is related to products. Using your word, “drops,” TC has been involved in A LOT more more product drops than SJ and SJ was involved in A LOT more new product introductions. With anticipation long been an Apple marketing tool and under SJ’s tenure, fulfillment of the anticipation was much more successful. Even in the operation realm, TC’s undeniable skill, has shown gaps.
      Yes, yes, there will be voices like Danox’s, but it’s those kind of voices and thinking that Apple doesn’t need. The standard isn’t the competitor (see Samsung, or?). This is a conversation is about excellence, not comparisons.

    2. It sure seems like someone at MDN woke up on the wrong side of the bed–dragging up something from the dregs of Drudge written by a hedge fund malcontent trying to place the blame on anyone but himself for his poor performance of late. Other hedgies haven’t done well this year either but haven’t been such babies. The Macalope had a better perspective about Forbes’ contributors like Somaney and those of his ilk:
      “Pundits have all the object permanence of newly born infants.”

  7. Concerning the iPad Pro, while I like it very much, I know the fact that it plays 2nd fiddle to the iPhone in features like 3D Touch, fast fingerprint recognition, and camera are just so they can be added to the iPad Pro 2 or something. I think we’re a bit tired of that product release methodology.

    1. Agreed!!! I don’t buy first gen products from Apple, period. I’m always disappointed when the second gen arrives with all the features I really want / need.

      iPad is prime example. Still using my iPad2 I bought the first week of it’s release. Almost 5 years, just now getting ready to replace because of poor Safari performance.

        1. I don’t see any sense in waiting on the Apple Watch, contrary to the “don’t buy first-gen Apple products” advice. It’s main benefits are activity tracking (standing, exercise and calories) all the time, not just when working out, and notifications (I use it for text messages, Facebook messages, I turned off Email which I think would be pointless on a small screen/limited ability to reply). The next Watch will be thinner, but the current one is just fine in size. I doubt they’ll be able to double the battery life so you’ll still be charging it every night, not that that’s a big deal. The processor will be slightly faster so there will be a little less lag when opening apps, and the heart rate monitor will probably be more accurate, but I don’t expect any dramatic improvements. Go to the store, try one on, buy one and return it within 2 weeks for a full refund if you don’t like it. This is one of those products you have to live with for a while to understand its benefits. Reviews don’t do it justice.

  8. I read once that the time to get out of a stock is when the company gets a new office. Everyone is more worried about what their new desk will be like and who it will be next to than what they are being paid for.

  9. So Forbes is concerned that Apple isn’t Wall Street friendly? Why do you think Apple has been buying back its shares? The more of Apple that Apple owns, the less they have to care about what Wall Street says. It’s not about propping up a stock price. It’s about keeping a bunch of investors from ruining yet another good company.

    MDN is correct in stating that product rollouts really do need to get better. No quarrel with that. But Forbes isn’t weeping for Apple. They’re weeping for Forbes.

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