Apple’s broken narrative

“Tim Cook and Luca Maestri had one goal for last week’s earnings conference call: convince Wall Street to begin thinking differently about Apple,” Neil Cybart writes for Above Avalon. “For the past two decades, Apple’s success has been judged by hardware unit sales growth, a metric that is now becoming increasingly at odds with the long-term strategy being pushed by Jony Ive. Management now finds itself searching for a new Apple narrative as iPhone sales growth slows. Wall Street has effectively declared the old Apple narrative broken.”

“A company’s narrative is the primary way a management team balances near-term demands associated with being a public company with long-term goals aimed at value creation. If a company suffers from a broken narrative, Wall Street struggles to properly judge the management team. The company’s valuation suffers as a result. Amazon represents a perfect example of how important a narrative can be to a company,” Cybart writes. “Apple management appears to be ready to push a new narrative on Wall Street… However, by talking up services revenue, management is moving away from Apple’s strength at the intersection of hardware, software, and services. Positioning Apple as a services company would also mean that Apple’s competitor list just got a lot longer with a slew of new players including Facebook, Netflix, Spotify and Hulu. This comparsion seems highly problematic for Apple since the company is known to have limited resources, and to not have a new narrative built around one of its strengths is questionable.”

Cybart writes, “A long-lasting narrative for Apple needs to reflect ideals pushed by Jony Ive.”

Much more in the full article – recommendedhere.

MacDailyNews Take: If Apple can get Wall Street to the point where the company’s “success will be measured by management’s ability to come up with new products that people love,” then the sky’s the limit!

UPDATE: 4:19pm ET: Alphabet Inc. surpasses Apple, now the world’s most valuable company


  1. The results of Alphabet explain the story: Alphabet lost $3 billion in bets that have not paid off. They reduced operating expenses from 21% to 18%. They show an operating profit yet squander money on things they don’t monetize well. Why did they stock pop? “transparency.” That word was used over and over again. So Americans like transparency now, not results. Alphabet and Amazon have succeeded in pulling the wool over superficial American eyes and the most valuable company in the world now is rewarded for being transparent, not for making money. If I were you I’d get my money OUT of the US. The stock market has once again become. House of cards. If transparency about losses makes you the most valuable company I the world, not your earnings, not your results, we are all screwed. Oh, note to Time: they are punishing you for not saying how many watches you sold.

    That’s all it is. Apple won’t reveal AppleWatch and AppleTV sales figures. So all of us that have invested our retirements are going to get screwed because new, hot shot, millennial shit brokers are rewarding companies that don’t grow nor make much money. May they all die poor.

    1. You make some good points, but let’s not get to melodramatic. Inadequate oversight of publicly-traded companies has never ended well. So while we don’t think Apple will start operating like Enron, it is still incumbent upon Apple management to prove it every day. Investors and taxpayers have been screwed so repeatedly and thoroughly in recent history that they demand and deserve complete disclosure of publicly traded company accounts.

      Apple prepares its own noose when it refuses to disclose its major business revenues and expenses. Worse, Cook does nothing to dispel rumors that damage the company.

      Finally, many investors don’t see that Cook makes good investment decisions for the long term. How many billion has Apple blown on experimental cars, round offices, deadBeats, and overpriced empty-suit executives?

      Cook needs to focus more attention to product development and customer service, creating another wave of overwhelming public appreciation for Apple quality and value. Apple is spending too much effort on under-the-table financial games and not enough time marketing and impressing its customers.

      Hell, in the last 7 years Apple just walked away from all its pro Mac customers without even a simple thank you for keeping Apple’s lights on when the company didn’t have Jobs’ cell phone business paying all the bills.

    2. Here’s a tip for you ML-L, read your posts before you submit them so you can catch all your typos. “…has once again become. House…” and “Oh, note to Time:…”


  2. Apple’s strength is not services. Sorry, but it ain’t. We’ve got a long history of sucking at services.

    Apple : Services :: Microsoft : Taste. That’s what everyone who’s ever watched the company knows. I use Windows 10 at work and marvel that Microsoft still can’t figure out elegant desktop computing after 35 years. I use Music and iTunes and marvel that Apple still can’t figure out simplicity in services.

    If Apple’s future is monthly subscription revenue I’m out. I thought, and still think (though less and less so), that Apple’s reason for existing was to create beautiful, intuitive hardware that feels human because it is so cued up to our needs and thinking. Do this with a car, I’m a true believer. Do this with a smart home, sure.

    But try to sell me on you BEING the music business, you BEING the cloud business, you BEING the video entertainment business (I’ve read the rumors about you considering original content), and I’m out. Just out.

    Why should you care that I’m out? You shouldn’t — not because I’m me. I mean nothing to the tech industry. I’m just some guy. But you should care if I’m losing faith. Because I may well be the canary.

    Let’s lock it up, folks. 2015 was a train wreck of introductions. 2016 is already cued up to begin with sales declines. Time to flip this narrative back to the plus side. That means remembering your bread and butter.

  3. A lot of people who want Apple devices simply can’t afford them. I’m from California but live in Poland now. There isn’t even an Apple store in Warsaw, the capital. Just “premium resellers”. There are no carrier subsidies here for smartphones. The rock-bottom price for a 2 1/2 year-old 16GB, 5s is about $440. This is in a country where the average wage is $750 a month. I’d like to see a $199 or $299 iPhone with an updated processor, Touch-Id and Apple Pay. They could use the same 5s camera, just get it in people’s hands and they’ll be hooked. They’ll spend the extra money the next time around to buy a better iPhone rather than a new computer.

      1. So Buzzy, your solution is for everyone in regions of the world with no Apple stores and only highly inflated prices to just call up their cousins in America to redistribute refurbished Apple products?


  4. Wall Street didn’t sell the stock, investors did. Investors do not “get” Apple anymore because what Apple was ended with Steve and Scott and countless others who are not there anymore.

  5. Does Apple truly have some fantastic futuristic ideas brewing in their labs? … … Stuff we see portrayed in movies about high tech firms.. .. Futuristic labs behind these massive safe looking sealed doors where mind boggeling futuristic products are displayed or are being worked on ?
    Do they?
    Or is it all mostly hot air… And they are scrambling and scratching their heads to discover what to do next ?

    This may come across as a stupid question… But i think its the main reason why apple is carring a PE of 10…
    The belief or faith or lack there of that Apple has it all figured out for the foreseeable future… That they are way beyond our imagination. That heir longterm planing horizon is much much farther than ours…….The confidance that they know whats up…. That they have these fantastic things brewing.. ?..

    I Used to be a lot more confident. 2015s dissaray and some truly stupid decisions , some bogus design and implementations have cast a shadow of doubt on me.
    (Like apple TV… Really apple? After all the hype for years and years?….. At the start you guys were saying it was just a hobby… Then Steve saying he cracked the code for The most awesome Tv experiance. You guys come out and said we have huge ambitions for tv. Tv is no longer a hobby..etc… You built up this hype for so long and then you deliver tv4 .. A less than halfbaked implementation…with zero ground breaking ui or functionalty… inferior in many ways to present dvrs in features of organization, synergy, and discovery . Tvos is a fragmented , half backed beta)
    ……is that supposed to inspire confidence..

    Then Rumors and i repeat just rumors that they might have neglected vr for 13 years …and are just waking up rather than leading.. ?….
    There is a lot more.. I’m just mentioning a few examples….

    I dont know….and I believe many feel like i do…they dont know… And thats where apple is screwing up the most imho…

    Whats google got going for them? There seems to be a huge amount of confidance in their future… But why .. Where is that tangible product.. Or growth prospect?
    I tell you where it is… It is in their relentless PR… They change the perception out there that they are doing magical things… Its a perception ..thats all it is… But look at how its effecting their stock and reputation.

    Relentless PR
    Something i feel Apple has forgotten about.
    Plus 2015s shameful dissarray…( despite, the numbers turned out ok…but thats the past Apple, dont let those numbers make you complacent )


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