Apple would be worth $1 trillion if market valued it like Steve Jobs-run company

“In a note that made waves this weekend, Global Equities Research’s Trip Chowdhry recently shared his displeasure with Apple Inc. management,” Jake Mann writes for Benzinga. “‘Tim Cook and the rise of Bozo Culture at Apple has destroyed $486 Billion of potential shareholder value,’ he wrote.”

Here are some key quotes from Chowdhry’s thesis:

• “Apple urgently needs to institute a “No Bozo Policy”…Investors are increasingly getting concerned about “Bozo Explosion” at Apple.”

• “Apple needs a new CEO: Jonathan Rubinstein, the father of iMac and iPod, Board Member of Amazon.com and a close associate of Steve Jobs…Tim Cook can go back to his Operations role.”

• “Apple needs a new CFO: Fred Anderson, he was CFO during Apple’s resurrection under Steve Jobs… Luca Maestri can go back to his Accountant role.”

Read more in the full article here.

MacDailyNews Take: We don’t call him Trippy Chowderhead for nothing.

They only have 60 days left to either come up with something or they will disappear. It will take years for Apple’s $130 billion in cash to vanish, but it will become an irrelevant company … it will become a zombie, if they don’t come up with an iWatch. — Trippy Chowderhead, Global Equities Research, March 20, 2014

SEE ALSO:
Analyst: Investors have ‘zero confidence’ in Apple management – September 15, 2015
Analyst: Apple to unveil Apple TV App Store as soon as next week – October 8, 2014
Apple secretly developing a 3D printer? – May 16, 2014
iWatch: Apple is not here to entertain you – April 14, 2014
Fire Tim Cook? Absurd. Cook has added $140 billion to Apple shareholder value since becoming CEO – March 19, 2014
Apple can’t replace Steve Jobs, but it must try or something – March 12, 2014

31 Comments

  1. Tim Cook definitely doesn’t inspire confidence in Apple’s future. He may be a good operations guy but my impression of him hasn’t changed much since his atrocious, first appearance as CEO introducing the 4S. The main change has been reducing his public role and having guys like Schiller and Cue carry the load. What’s the point of having a guy as your frontman, when he’s not a good public speaker and communicator?

    1. Well, do you think Satya Nadella is some grand CEO? I doubt he is yet Microsoft has seen some fairly large share gains in 2015 while not making all that much revenue. I doubt there is that much of a difference between Nadella and Cook. It’s unlikely Apple will come up with another Steve jobs but anything is possible.

  2. Maybe a bozo, but echoes a growing chorus identifying the real and only problem with AAPL and the once great company that made things that just worked and were the envy of the entire tech world. Sadly, not more and the singular cause of this condition – Tim Cook.

    1. Ah, well… I’ve been polite to this point, but — you PROMISED to stop with the Tim Cook drivel, Jay. And I keep pointing that out. So today I’ll just say “fuck off”.

      1. Don’t bother with Jay’s word or promises, he’s shown amply that he’s not on the side of truth, he’s a troll, feed him and watch him dance.

        For the record of course here is his comment, from Sept 21 2014:

        “You will be pleased to know that I’m about done with saying what I say on this board – it’s clearly been therapy for me and I’m very close to not needing it any more – I’ve reached the realm of apathy.”

    2. Apple had an uninspiring year….lots of half baked solutions… I agree…..And believe you me i am Pissed as can be looking at some of the stuff they put out and how they launched them….

      But..
      Apple has never made more money than they did in 2015…. No company in historty ever has ! That is. Fact nit an opinion! Lets keep that in mind before u all jump on the band wagon of ousting Tim Cook.
      Apple At Steves time.. Was a much smaller company…. Lets keep growing pains in mind when you decide to bash Tim.

      I personally Am looking forward to a great and inspiring 2016 from Apple…
      An Apple that stabilizes and learns from its own mistakes… ….
      I Believe Tim is the man to pull that off.. Why?
      Because his head is not in the clouds while riding his ego……
      Didnt Steve personaly pick him as Ceo.. After years and years and years of having him as his right hand man?
      Was Steve completely wrong and wrong for so long ?
      The Steve that is so superficially named in the heading of this article?

  3. I call bull.

    People didn’t respect Steve when he ran it, either. Oh, sure, “the faithful” did, but outside that circle, not so much. Little has changed in that regard. Steve is dead. *gasp!* Tim is CEO. And Apple is still Apple, and making the best products on the market. Could they be better? Sure. But that was always the case, too. Steve had his flops, but the directed Apple to the insanely great products we know and love. I love my iPad Pro. My wife and sister love their AppleWatches. Still insanely good, despite some hiccups along the way.

  4. Um…No.

    Apple’s stock is worth what is is worth; no more, no less. It is also not representative of the value of the company nor its performance.

    The sotck is down because the market is down. The market is down because of factors not related to people’s desire for consumer goods.

    There are wars and political instability throughout the world. China’s economy is ready to tank.

    Americans have major political races this year.

    Trip Chowdhry is trying to move his firm into a favorable position vis a vis Apple Stock.

  5. Sure… And pigs could fly if they had wings. Steve Jobs is long gone and he’ll never be coming back. I don’t need Apple to become a trillion dollar market cap company. I’m only asking to at least value Apple on par with other profitable tech companies. If Apple can’t be valued on par with at least Microsoft then I truly don’t understand what makes a company valuable.

    It’s been said that tech companies should have higher multiples than oil or utility companies, but ExxonMobil has a P/E of 16 to Apple’s P/E of 11. AT&T has a P/E of nearly 40. Exactly, what type of company is Apple being valued as for a company at the top of its field in earnings? Something just doesn’t seem right apart from the fact that investors are entitled to invest in companies that they think can offer them decent returns. If Apple isn’t seen that way, then maybe Apple is somehow at fault.

    I may be too stupid to understand what other investors are able to understand. For me, as long as a company has relatively high revenue, profits and a loyal and solid customer base it should be valuable whether it can grow double digits every year or not. Maybe that’s too simplistic a view. Consistently recurring revenue should count for a lot as far as an investment is concerned.

    1. That’s because you are trying to use logic in the stock market. Which does not apply. The market is not rational. It is irrational.

      In theory, traders are skating to where the puck will be, not where it is now. So their thought on AAPL is that it can’t continue to grow (“law of large numbers”, they say) and should shrink, by extension, as others poach their customers. Of course, this is and always has been BS, but that’s how they think.

      Instead, they envision that AMZN will somehow manage to expand its revenues to more than the GDP of most countries (because the law of large numbers doesn’t apply to them for some reason) by pricing products so low (at no or negative margin) they drive their competitors out of the e-commerce space. At that point, they use their near-monopoly power to raise prices so their margin will rise from approximately zero (they are actually negative if you discount their web services division) to something much larger, all the while ignoring that the moment they do raise prices, dozens of firms are there to compete with them and eat their lunch. In short, these investors are willing to shell out for a P/E of several hundred for an opportunity to drink the Bezos Kool-Aid that they should “be patient”. And here’s the killer, even if that were all true and it worked and they drove even Walmart and Target off the face of the earth, AMZN is *still* never going to give a return that justifies its **current** stock price!

  6. TC’s record has been mixed (some good some bad), I won’t comment here but I’ll like to share when I was reading:

    from a business book:
    the author describes the two main types of top managers:
    Type 1, Type 2

    Type 1 is described as those who have internalized a lot of information and skills and acts (apparently) by instinct. They are usually very fast to react and can appear to be magically ‘ahead of the curve’. Wayne Gretzy and Steve Jobs were the top examples quoted. Most successful entrepreneurs (as opposed to managers) are Type 1s. ( the details of type 1 brains and how they supposedly ‘chunk’ info etc in the book is top complicated to explain here )

    Type 2 are usually background managers and bean counters who are meticulous and depend on data (latest sales polls etc) to make decisions.

    sufficient to say I believe that T.C is more a Type 2. Note how many times he has said “the data has led us to believe”. Note how the data misled him in certain areas like iPad sales, he focused so much on it when it was booming and neglected the Mac (look at the dozens of iPads ads in the last 5 years and the almost none for Mac) yet today at the end Mac sales equal iPad in revenue (approximately).

    If he had a core internalized understanding of how many people compute i.e. the still need ‘trucks’ he wouldn’t have depended on the initial ‘SALES DATA’ for iPad so much .

    also because there’s no ‘data’ on new products with new features so many launches were flubbed (they were unable to predict many things)

    I still believe in T.C but he needs to learn and focus.

  7. Steve Jobs died in October 2011.
    Apple’s fiscal year runs from October to September.

    Total Sales and Net Income (in billions), and the AAPL share price, for FY 2011 and 2015 are these:

    Total Sales: 108.6 v 231.3
    Net Income: 25.9 v 53.4
    AAPL: 52.83 v 112.12 (Close of week ending earliest October)

    Sales increased 212%, Income increased 206%, and the price of an AAPL share increased 212% from FY 2011 to 2015.

    This represents a compound annual growth rate of over 18% for each of Sales, Income, and the AAPL share price.

    Should AAPL trade substantially higher? Hell, yes. Is Tim a loser compared with Steve? Hell, no.

    1. I’m pretty sure when you’re stating number increases, “200% of ” and “an increase of 100% for ” mean the has ‘doubled’.. Unless you mean the numbers your quoted have increased over 3 fold, you probably meant to not use ‘increased’ or neglected to subtract 100 from your percentages.

      1. Dang, forgot that using the ‘less/greater than’ brackets would be taken as HTML..

        I’m pretty sure when you’re stating number increases, “200% of [something]” and “an increase of 100% for [something]” mean the [something] has ‘doubled’.. Unless you mean the numbers you quoted changed by greater than 3x, you probably meant either to not use ‘increased’ or neglected to subtract 100 from your percentages.

        1. Thank you for clarifying the point. You are correct. Given the raw data given for 2011 and 2015, you know I neglected to subtract the baseline of 100%.

          Let me correct the statement: Apple sales/income/share prices in 2015 were more than DOUBLE what they were in 2011. This means they INCREASED over 100% between 2011 to 2015.

          To repeat: Apple sales/income/share price have appreciated at a rate of over 18% per annum since Steve Jobs died. And that was on top of already high levels.

          1. The fact remains that every product and service that delivered those profits came from Steve Jobs’ work at Apple for the decade before Cook took the role of CEO. Cook doesn’t deserve credit for iPhone or App Store profits — they would have occured even if Apple had a chimpanzee for a CEO.

            The new “hit” products clumsily launched under Cook have been mostly derivatives with incremental innovation, which is basically autopilot management that anyone could have accomplished. The all-new or major rework products launched under Cook have disrupted and disgruntled customers (iOS7, iWork, Mac Pro, MacBook, iPhone 5C, all recent versions of OS X, …) due to product limitations and/or quality issues. The Apple Watch and Apple TV are both late entrants to existing markets and are exciting only a slim niche of users with money to burn. iCloud, like most online services, remains a highly constraining disaster. Beats & Apple Music are messes that added more confusion to iTunes than ever before. Syncing iPods and iPhones has gone from a little clunky to downright impossible. Apple Retail has gone from fun to annoying. I don’t make appointments to retail shops, thank you very much. And despite Apple’s cash horde, the number of stale products that have received no update continues to grow longer every month.

            Where is Apple spending its money? Mostly on a round office park ($7 billion and counting), dumb acquisitions (Beats, $3.1 billion and counting), and air headed executives who have contributed nothing (Ahrendts, $76 million and counting), and Wall Street gifts (billions in buybacks, none of which boosted stock price, only needlessly increased Apple’s debt.)

            Instead of keeping Apple users informed and educated, with clear differentiation that makes it abundantly clear how Apple offers users better productivity or value or durability, Apple focuses more than ever on style over substance. Apple abruptly kills products (Aperture). It relies on 3rd party bloggers to support its customers who are baffled why Apple software GUIs are now hard to use, with unintuitive workflow and annoying complex inputs and multi-clicks and gestures required to do what used to be simple tasks (Save As). Help menus and user guides are next to useless and even the long-time Apple fans can barely explain how things work, or why. (when they work, that is. now that iCloud and rental computing is Cook’s focus, one can expect continued poor support for formerly excellent & secure local computing). Nobody can say that “it just works” anymore, and Apple doesn’t allow the user to opt out. its annoying trackers and nanny ware reminds users constantly that they really, really, really must upgrade now or tonight. No option to say no, and no option to revert to an earlier stable iOS release when things are broken.

            Cook is a poor CEO because he has allowed complacency to set in, user focus is no longer important. While pushing major efforts into luxury computing, he has abandoned the small companies, the artists, and the audio & video & photography professionals who kept Apple alive when it mismanaged itself into near oblivion in the late 1990s. If and when the iPhone was ever to stumble, I doubt that he would find that many truly loyal customers. iPhone users can, and do, switch platforms all the time.

            Cook and his overpaid executives have delivered poor innovation. He may enjoy present large cash flow, but not excellence. As an underdog, Jobs knew Apple had to be the best. Now that Apple has too much money for its own good, Cook is letting Apple rot from the core.

            1. Totally disagree. Apple had plenty of crap-ware under Steve, too. A lot of long-time fans on this website can surely attest to that. Ya, Steve was great, but he was no saint, either. Many, if not most, products under his reign also suffered from various limitations. Yet he, and his team at Apple, kept their heads down and soldiered on and made things better, even while riding the edge of technology and liberal arts. I am sick and tired of people deifying Steve and the company he ran. All at the expense of the current Apple team. Reality is a constraint. Steve’s team is alive and well and carrying on in his name. Enough.

  8. How about shaking things up a bit in Apple like this:

    CEO – Wozzie
    Just think of the “image” value it would have for Apple and especially AAPL to have one of the founders as ceo.

    CFO – Warren Buffett
    No brainer here…

    CTO – Elon Musk
    Another no brainer..

    COO – Marissa Mayer
    She would be a great CEO, but only after her feet is wet a bit within Apple

    Chairman Of The Board – Tim Cook

    Timmy would be an awesome chairman and would oversee the whole Apple shebang.

    After a while Marissa could become CEO and Wozzie the new chairman. TC would get a well deserved rest and some hefty stock options.

    – WozzieFan –

    1. Wozniak is not any kind of a businessman. He has no clue about running a business. Woz is a tech genius has been. . . but no more.

      Warren Buffett is not a financial officer type. He’s a trader and investor type. That is not what you need in a CFO.

      Elon Musk is making his money off of Tax Credits and has yet to turn a profit or sell anything that has turned revenues for more than even $1 Billion. No.

      Marissa Mayer’s may look good, but her star is fading at Yahoo. She has never run anything to produce a product. Why would you expect her to be able to step in and be an operations manager to run the operations of the largest company in the world by Market Cap? She’d be out of her depth. It’s not in her skill set.

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