“Apple Inc.’s dismal earnings announcement shows why it badly needs to rethink its innovation model and leadership,” Vivek Wadhwa writes for MarketWatch. “Its last breakthrough innovation was the iPhone — which was released in 2007. Since then, Apple has simply been tweaking its componentry, adding faster processors and more advanced sensors, and playing with its size — making it bigger in the iPad and smaller in the Apple Watch.”
“Chief Executive Tim Cook is probably one of the most competent operations executives in the industry but is clearly not a technology visionary,” Wadhwa writes. “Apple needs another Steve Jobs to reinvent itself; otherwise it will join the ranks of HP and Compaq.”
“That Steve Jobs may be Elon Musk — who has proven to be the greatest visionary of our times,” Wadhwa writes. “Apple should buy Tesla and appoint Elon Musk as CEO.”
Read more in the full article here.
MacDailyNews Take: This is the sort of punishment Apple and Tim Cook must endure for their “Big Miss” of posting revenue of $50.6 billion and net quarterly profit of $10.5 billion? Those are each “billion” with a “b.” Compare those results to any other company on earth.
Musk would say to hell with that.
The reason he would say that is because he (like Steve Jobs) is extremely well fitted for startups like PayPal, Tesla, and SpaceX. He is not so well suited for an established company like Apple. The reason Wall Street likes him is because his companies have spectacular growth rates, and Apple recently has not. Why? Could be Cook or it could be…
Once upon a time, a king was saved from disaster by a magician who had been promised the king’s only child in marriage. The king reneged, withheld the princess, and asked the magician to propose an alternate reward. “How about filling a chessboard with tiny grains of wheat, with one grain on the first square, two on the second, and so forth?” The king agreed.
After about 12 squares, there was a pound of wheat on the board. By around Square 22, there was a ton. By halfway through the board at Square 32, over a thousand tons and a million tons by Square 42. Before Square 51, the board was holding the world’s entire annual crop of wheat. To fill the board, the king would have to provide the magician with roughly 15,000 years’ worth of the planetary wheat supply.
The point? Not even Apple Inc. can double its profits every year forever. At some point, they will reach the limits of growth and its investors should expect a spectacular and very steady income instead of spectacular and uninterrupted annual growth. Wall Street has yet to figure that out.
Nice. A secondary moral of the story is contained in its ending (which you left out): when the king catches on, he’s furious and has the magician beheaded.
The scimitars are flashing, all right.
The last last year was the most profitable year in corporate history. So, in what way is Tim Cook failing? He has no say in the market valuation and as a stock holder I don’t want him focusing on it. The current situation is unprecedented: since no company has ever made this much money we must ask ourselves: does a company’s profits have to grow every year in order to command a high P/E ratio? Why isn’t generating $50B/year enough? The law of large numbers obviously comes into play and no matter how successful Apple or any other company is their profits must plateau or they would become the entire world’s economy. The real issue is whether the profits are sustainable even if plateaued. From all perspectives it appears to me Apple’s profits are sustainable. There is no company in the world that is as operationally proficient (thanks to Tim Cook!!), and they are reasonable innovative. They are just getting started developing services to market to their large and loyal installed base which will likely produce vast recurrent income. Don’t believe any of this? Go ahead, sell your Apple shares, I’ll buy them at a discount!!
Elon Musk Is a conman. No /s here.
That “conman” of yours sure ships a lot of exciting product, as well as ensuring a lot of tech is moving ahead.
The world needs more “conmen” like Musk IMO. We’d be bounding ahead.
Tesla is doing so well right? Supply chain God?
“Tesla Motors Inc. said late Monday it fell short of first-quarter sales goals and blamed the miss on a parts shortage that hit the Model X SUV, but the electric-car company vowed not to repeat the mistake with its coming Model 3.” Short term memory.
http://www.marketwatch.com/story/tesla-reveals-production-issues-with-model-x-promises-model-3-will-be-different-2016-04-04
Why aren’t all the “experts” who know how Apple and other companies should be run – not running big successful companies and rich?
Makes sense in an Entertainment Tonight kind of way. Musk would be a more successful face for media types but I fear he wouldn’t fit well with an established company and is more suited to startup mode.
It could work if Cook went back to supply chains and Musk became the new face of the franchise, sharing power with Apple’s other creative visionary, Ive. At that point Forestall’s NDA could be nullified with perhaps a tolerable stock options penalty in exchange for taking over software engineering and kicking some ass.
Who is Elon Musk? has he ever run a profitable company? Does he even know how to make a mass market product?
PayPal.
However, I have to agree, this is a dumb suggestion.
They made a profit once from alternative energy credits when Tesla had hardly any production. Now they can’t even get the Model X production right. Solar City stock is in the tank.
Could buy one of the Amercian auto companies for cash and it would be earnings accretive (not that Apple would want to).
Telsa erred by not using contract manufacturers for its cars. At some point Tesla will have labor issues.
Battery tech at risk from fuel cell vehicles at some point. I think Apple car will not have batteries. Lithium supplies are a capacity constraint for producing millions of electric vehickes.
The best idea I’ve heard in a long time.
Wow, now Marketwatch add his grain of salt.
Nobody cares about the real metrics because nobody has ever been there. Apple is the only company at this level. No one is near.
As time will go, dust will settle and we will clearly see where Apple is going;mainly revenue streams. It has already started.
51 millions iphones sold last quarter and everybody is panicking…
51 millions, 5-1 millions, 51,000,000 iphones. Are you kidding me? That boat is alive and kicking. Knowing those iPhone last at least 2-4 years, Apple is ok with retention here.
Yes. Samsung shipped (not sold) 10 million S7s and they are hailed a huge success, simply because last year they sold diddley squat. But 50 million iPhones is not a success????
Lyin’ Elon. He just wants Apples spaceship patents for his own company.
Nothing would be delivered on time if Musk were CEO, and exaggeration would know no bounds, since Musk gets a $1B bonus, if TSLA hits certain price targets.
Musk may be a visionary, but nothing like Steve.
Any one who calls apples earnings Dismal is either a total ignorant moron.. Or a short or a competitors troll … Or all.
Why on earth would Elon Musk want to become an employee of a company that he did not create?
He did not create Tesla Motors. But I get your point.
Apple reported more profit last quarter than Google, Facebook and Microsoft COMBINED. Dismal???
Poor Mr. Musk… as if he isn’t busy enough.
Tesla is operating at a loss! How does this make Musk better than Cook?
Why do you publish such trash?
Replacing Cook with Musk would be a big step down.
Apple did not miss. They hit exactly where they guided. Perhaps they should go back to the days of ultra-conservative guidance.
The author is out of his freaking mind!!! Apple is a company with a very long time horizon and not particularly interested in pandering to the market. As an investor I know Apple will be best off focusing on long term goals and making the best products and services possible. I can live with a measly $40-50 billion in profits even without year over year growth.
By the way Tesla/Musk would never sell out to Apple unless under extreme financial stress but I would endorse the idea of buying them for say $40B if they agreed.
Tesla has taken thousands of deposits on a prototype car–a car that likely won’t begin to reach customers for at least another year. Can’t imagine Chevy, or Porsche or Toyota doing that. It’s because his burn rate is so high that they’ll run out of money before that.
This scheme already has a name. “Ponzi” comes to mind.
Does any of Musk’s unfortunate corporations actually make money? He is high on himself and ideas, but he relies on government and private money to keep his empire going.
Apple Inc.’s dismal earnings announcement
NO it wasn’t. So many asinine analcysts.
That Steve Jobs may be Elon Musk — who has proven to be the greatest visionary of our times
NO it’s not. Elon Musk, as I keep pointing out, despite it being blatantly OBVIOUS, has his own gig. He’ll have zero interest in Apple. DUH.
Yawn. You’re remarkably unimaginative Vivek Wadhwa who writes for MarketWatch. It’s an old idea you merely regurgitated.
I wouldn’t want to take Elon Musk’s focus away from Tesla and SpaceX. In a way neither of these businesses look anything like Apple or are anywhere close to what aple does or needs. Space X may get us to Mars and may make going to a Hotel in Space a reality but that isnt anything like making iphones ship on time. Likewise apple probably will sell more iphones in one day than Tesla will sell cars for its entire lifetime though I love their cars and will definitely buy one when I can afford one.
I agree Elon Musk is perhaps the most visionary executive in business today but I don’t think he is what Apple needs. Apple needs a Product Person, he or she doesn’t have to be CEO. They just need to be on the team.
Cook could do a better job of righting the ship at Tesla than the other way around!
Thought, meet bubble
Year-over-year profit comparisons, law of big numbers, sustainable profits, etc. aside, it would be nice to see at least one innovative new product this decade. The last new product success was the iPad and the big innovation was they made the iphone bigger.
I can imagine how utterly bizarre his keynotes would be and I can imagine the mess he would make of Apple. He’s happy where he his and I’m happy for him to stay there.