Apple is at a crossroads. The next 12 months will determine if Apple continues to slowly rot or rise from the ashes. IMO, Apple needs to make massive changes.
1. Company Vision. The CEO needs to make this clear. And no its not enough to say their vision is to make the best products. I'm sorry that is not enough anymore. The company Vision should be to build the biggest and best PLATFORM on the planet.
2. Stop short-term thinking. This is rotting the company from the inside. Stop being so concerned about short-term profits. Be more concerned about building a strong LONG-TERM platform and user base.
3. Stop being a Wall Street lapdog. Stop bending over backwards to please Wall Street. Stop with the super detailed reporting. Stop with the politically correct answers in conference calls. You are the richest and most powerful company on Earth. Stop shaking in fear of Wall Street. Give them the middle finger.
4. Takes Risks. That was the backbone of Steve Jobs Apple. Be willing to fail. Be willing to look foolish and lose a ton of money. No one made a great product who was afraid to fail. IMO, Apple has been risk adverse since Jobs had died.
Those are the 4 key principles Apple needs to focus on going forward. This is how they should implement each of the four principles:
1. Executive shake up. This isn't a hardware company anymore. This is a platform company. Some executives need to resign or reassign. Apple needs to hire several high end services and social network executives. IMO, the executive has become to stagnant. Fat and lazy.
2. Stop selling piss poor base level models. Apple does this to increase short-term profits. Stop. Just stop. No more 16GB iPhones and 16GB iPads. No more selling $1500 iMac that have crappy harddrives and pathetic amounts of RAM. Base level Apple products should be PREMIUM. This of course will hurt short-term profits but in the long-term it will lead to customer satisfaction and an increase in user base.
3. Simplify financial reporting. Apple reports units of iPhone, mac, and iPad sold each quarter. Stop that. Apple should only report total hardware sales. Why? Because Apple is a PLATFORM company. Apple should not care WHAT device you use as long as you are on their PLATFORM. As long as hardware sales as a total is strong who cares what device people are buying. Giving detailed units sold only gives Wall Street more information to manipulate. The focus should be growing the PLATFORM not a specific device. So really there should only be 2 buckets that Apple reports revenue: Hardware and Software/Services.
4. Split hardware sales into hardware and software. Apple needs to recognize the true value of iOS/OSX in every device they sell. For example an iPhone that sells for $600 should show $400 of hardware sales but also $200 of software revenue. Then the $200 of software revenue needs to spread over 2 years. That way huge spike in hardware sales (like last year with the iPhone 6) is spread over 2 years. This will flatten sales peaks and fill in sales valleys. And it is a truer measure of the value of iOS/OSX. Apple has been understating its true software/service revenue by assigning almost 100% of iPhone/iPad/Mac revenue to hardware and almost none of it to software.
5. Make better use of the cash. Apple has $250 billion in cash. Its doing nothing right now. Apple should used that money to make acquistions. Apple needs to use that money to invest heavily in the company.
6. Act like the BADASS you are. Apple is the most powerful company in the world. Act like it. Instead Apple acts like a wimp who gets bullied every day and school. And then the next day gives the bully flowers. Come on. Apple needs to hire an entire 20 man staff who sole go is to counter the anti-Apple media and Wall Street. If there is a rumor in the media about weak sales or supply chain weakness Apple needs to shut those rumors down immediately. Apple needs to embarass the media who publish LIES about Apple. I would even consider Apple 'sending a message' to analysist like Ming Kuo. I would hire 10 guys to visit Kuo and 'have a little talk with him'. Nothing illegal or criminal. But just to remind anyone in the media that Apple is watching. I'd also like Apple to start suing some of these media writers. Apple probably won't win but it will send a clear message: DON'T FUC WITH US. WE WILL TAKE YOU TO THE CARPET IF YOU KEEP PUBLISHING LIES.
7. Stop the buyback. It has done crap. Apple has better uses for the money.
8. Stop the dividend. This will piss people off. But Apple has to decide if they are still a growth company or they are an income company. If they are a growth company they need to stop paying a dividend and use that money to invest in acquisitions or internal investment. If they are an income company they need to increase the dividend to 3% immediately. Paying a 2% dividend is useless. It is too low. Apple is trying to please everyone and they end up pleasing no one. IMO, Apple is a growth company. It needs the cash to invest in itself.
9. Cloud. Get off your ass Apple! Amazon/Google/Microsoft is kicking your ass in cloud. Even small companies like Dropbox is destroying Apple. Apple should announce they are making a $50 billion investment in building their cloud infrastructure. Apple should be a leader in Cloud. PERIOD. Offer Amazon/Google/Microsoft Cloud executives massive money to join Apple and get this done already.
10. Take some design risks. IMO, Apple designs have become stale. Its been making things thinner and gold the last 4 years. Apple's design teams needs a serious breath of fresh air. I'd consider hiring a new design Co-Chief with Ive. Ive's free reign in Apple design has run its course. We need some new fresh ideas and designs that stand out in the market. As much as I hate the practical aspect of the Samsung S7 edge, I do appreciate the risk they took. Apple needs to take more design risks.
11. No more S-cycle phones. The only reason Apple does a 2 year iPhone design cycle is to increase profits. JUST STOP. The market moves to fast to be stuck with the same design for 24 months. I'm sorry but the iPhone 6s looked dated the day it was released. Apple needs to make a new design EVERY YEAR for iPhone.
12. Stop dicking around with iPad. I mean seriously. Its almost if iPad is the ugly red headed step child. Not releasing a new iPadAir for TWO YEARS? Making crappy upgrades for the Mini? Come on. No Pencil support for Apple Pages or Apple Numbers? I mean WTF. Start taking the iPad business seriously or shut it down. When I mean shut it down I mean stop running iOS on iPad if you are only going to make the iPad a large screen iPhone. iPad should also be running OSX. Period. I'm sorry but the App makers were given 5 years to write software for iPad. They have failed. Time to make iPads that run OSX.
13. Make OSX mainstream. iMac and Macbook prices are way too high. Stop producing crappy base level models. Sacrifice some profits to get more sales. People want to buy Macs. But they are so damn expensive, especially outside of the USA. Make certain iPads run OSX. OSX needs more market penetration. Remember we are building a PLATFORM.
14. Stop being such an ASS in negotiations. Apple needs to get the live TV deal sign. Even Sony and Dish were able to get a deal sign. Come on already. Stop trying to extract every single penny in negotiations. Give in a little. By now Apple should have already had these deals signed: Live TV deal, gaming subscriptions, and home security. Get off our Ass and do something Eddy Cue.
15. Get off your high horse and start building your ADVERTISING EMPIRE. I respect Cook for trying to preach privacy. But lets get real. Probably 90% of iOS users use Google search. So obviously iOS users don't really care about privacy THAT MUCH. Probably 70% of iOS users use Facebook. Apple has the most valuable 1 BILLION users on the planet but refuses to monitize this incredible user base. Its flatout crazy and irresponsible. Apple needs to start building its advertising empire with Apple based search, Apple videos, and Apple social media. Apple needs to publicly announce they will spend $100 billion in the next 5 years in building this empire. Google/Facebook combined is worth over $800 billion. Apple should not stand on the sideline of a ONE TRILLION DOLLAR INDUSTRY. If they do nothing Google/Facebook will continue to make inroads on Apple users data.
You should email this to Apple's PR team or directly to TC.
6. Act like the BADASS you are. Apple is the most powerful company in the world. Act like it... I would even consider Apple 'sending a message' to analysist like Ming Kuo. I would hire 10 guys to visit Kuo and 'have a little talk with him'. Nothing illegal or criminal. But just to remind anyone in the media that Apple is watching. I'd also like Apple to start suing some of these media writers. Apple probably won't win but it will send a clear message: DON'T FUC WITH US. WE WILL TAKE YOU TO THE CARPET IF YOU KEEP PUBLISHING LIES.
You should email this to Apple's PR team or directly to TC.
I particularly like this idea. Apple should have it's own para-military strikeforce, ar at least "men in black". /s Surely nothing bad could happen, right?
(BTW, I do think Apple already has a private security force. Didn't they pay a visit to some guy a couple years back who was suspected of having an iPhone prototype, and following up a little later with a few off-duty police officers in tow as ride-alongs?)
Apple was the WORST performing Dow stock in the last year. Think about that for a second. I used to be very bullish on Apple and made a ton of money on the stock. I sold it all right before Icahn got in and started pumping. I saw the writing on the wall everyone is starting to see today (and the stock reflecting it). Today I am looking pretty smart. Sure I would have been smarter to ride the Icahn wave up to the high's and sold there but most likely I would have rode it up and back down here again. Instead I redeployed all that cash into market performers and outperformers which as we know has done quite well against apple.
I still own Apple products. Many of them including 4 iphones, 3 Mac's and 5 ipads. I for the most part "like" the products. I used to LOVE all of them. Lately I've been seeing too many bugs, quirks and issues with the software. I'm not excited about the new hardware relative to what I already own. I don't own a watch but was hoping apple would give me some reason to buy one. I'm a gadget freak and if it had marginal value I would get it but I don't see it.
I also am growing tired of apple's pricing on hardware in terms of their memory storage scheme. Anyone can see and agree that it is structured for profits, period. That doesn't work well for me. Storage memory costs them bupkis but they gouge consumers on it with all their products. Not cool.
Last I hate the closed wall BS they do. I don't want my photos bundled up into one large Photos database in a walled garden. I want them out in the open in a filesystem any program or browser can access, read and manipulate. This was clearly done to wall people in or keep other apps out from accessing photos. There is no fundamental reason not to have the photos in the filesystem. Unix systems can handle this EASILY.
So I'm not long or short the stock now or any options on it. Been 100% out and enjoying the drama free time these last couple years. I am looking to possibly go short some PUT contracts if the stock hits 85. I would consider writing a 70 or 75 strike PUT out to January 17. Get a few bucks for it and if the stock is PUT to me I own it for a few bucks under the strikes. If not put to me I just keep the premium. Free money.
You keep talking about the loss and the "failure".
But what about the gains and increase and money in the bank? Yes, it's less now than it was a year ago, but it's still more than it was when he took over 5 years ago.
Come on man.
The massive rocket ship that was the iPhone was going to blast off with or without Cook. You can't give Cook credit for the iPhone taking off in 2012.
Hard to believe the stock is worth LESS than in 2012.
So do you seriously think it was Cook that made the stock go from $50 to $100 in less than a year? That was his first year as CEO the stock DOUBLE. Was that Cook? Come on man. It was all about Jobs.
And since it reached $100 in 2012 the stock is LOWER today.
Mainly a point about chronology. The iPhone was announced in 2006 and introduced in 2007. It went through many iterations before 2012. Steve Jobs passed away in 2011 and Tim Cook was effectively in charge well before 2011. There were many factors and individuals involved in the continuing massive success of the iPhone and iOS juggernaut. To downplay the role Tim Cook played and continues to play is ridiculous.
But the winning dopey comment is "Hard to believe the stock is worth LESS than in 2012". In June of 2014 Apple did a 7 for 1 stock split. Do the math.
You seem to think that there is a direct relationship between Tim Cook and the share price. As Icahn said, China was his primary reason for cashing out. I don't think he is being disingenuous. It may not be entirely the Chinese government but certainly the Chinese economy is not helping matters. There are many contributing factors that affect the share price, not the least of which is the slumping worldwide economy, strong dollar, smartphone saturation in the the US/Europe as well as wars and the threat of wars, sanctions, the pending election, etc. The FBI case didn't help either. It is not all Tim's fault.
You say that he wasted $115 B but for all we know, the buyback may have actually shored up AAPL share price from an even worse fate given all the other external pressures. As you yourself have argued, the iPhone 6 blowout was a one time event.
Apple has much smarter financial experts than you. If you don't like their decisions, as a shareholder, you have a vote. You can also vote by selling your shares. If you buy high and the stock drops, that is what is known as risk. Shit happens. Deal with it. Whining on AI isn't going to get your investment back.
Icahn is not your average investor and is privy of things most individuals are not. He sold because he knows that Apple's stock will continue to fall over the next year+. He holds clout in the investment world and other large investors will soon do the same. He may come back once Apple's stock hits around $80 to try to force Cook out. It's not by coincidence that he waited until now to sell his shares. I'm sure many here may disagree, but time will tell.
The massive rocket ship that was the iPhone was going to blast off with or without Cook. You can't give Cook credit for the iPhone taking off in 2012.
Hard to believe the stock is worth LESS than in 2012.
So do you seriously think it was Cook that made the stock go from $50 to $100 in less than a year? That was his first year as CEO the stock DOUBLE. Was that Cook? Come on man. It was all about Jobs.
And since it reached $100 in 2012 the stock is LOWER today.
Mainly a point about chronology. The iPhone was announced in 2006 and introduced in 2007. It went through many iterations before 2012. Steve Jobs passed away in 2011 and Tim Cook was effectively in charge well before 2011. There were many factors and individuals involved in the continuing massive success of the iPhone and iOS juggernaut. To downplay the role Tim Cook played and continues to play is ridiculous.
But the winning dopey comment is "Hard to believe the stock is worth LESS than in 2012". In June of 2014 Apple did a 7 for 1 stock split. Do the math.
Your really don't understand what you are talking about on the stock price - SPLIT ADJUSTED AAPL is trading lower than September 2012 - you better learn math.
A couple things that are revealing with Carl's investments.
1. Upside with Apple isn't there. He sold all his stock. He is also a billionaire who wrote books on how to make money, not loose it.
...
OK, I was going to let it go after the first two times (in an earlier posting) but not again. The word is LOSE, not loose. They are two completely different words and the one you mean to use is spelt with just one O, unless you really meant that he intended to set that money loose, rather than to simply lose it. My apology in advance for the rant, many if not most people make this mistake so it seems inherently unfair to single out anyone. Now I will go back to my location under the bridge.
But the winning dopey comment is "Hard to believe the stock is worth LESS than in 2012". In June of 2014 Apple did a 7 for 1 stock split. Do the math.
I did factor in the split.
In Sept 2012 Apple was $700. Divide by 7 and you get $100.
Nothing like opening your mouth to update your information. I apologize for that mistaken criticism. I still think revenues and profits are more important facts but for the investor the stock price is THE number.
We now know how long the Steve effect lasts (i. e. how long a company can stay afloat with the ideas of the CEO/ founder after they have passed on). 5 years.
We now know how long the Steve effect lasts (i. e. how long a company can stay afloat with the ideas of the CEO/ founder after they have passed on). 5 years.
Icahn is not your average investor and is privy of things most individuals are not. He sold because he knows that Apple's stock will continue to fall over the next year+. He holds clout in the investment world and other large investors will soon do the same. He may come back once Apple's stock hits around $80 to try to force Cook out. It's not by coincidence that he waited until now to sell his shares. I'm sure many here may disagree, but time will tell.
Funny how he was wrong for many years now he's a fucking god of investment? Gimme a break.
These hedge fund managers are like prostitute. Push companies Board/management in their favor. Makes, money and move on. Leave behind skeletons for others to worry.
I have listen to Carl on CNBC and other media outlet for a long time. He was pushing Apple to give out dividend and buyback shares. He said, he is in Apple for long haul. Tim Cook is mild natured CEO unlike Steve Jobs who would think about Apple and it’s average share holders to keep company more financially secured to tackle for rainy days and have money on hand for continuous innovation.
10. Take some design risks. IMO, Apple designs have become stale. Its been making things thinner and gold the last 4 years. Apple's design teams needs a serious breath of fresh air. I'd consider hiring a new design Co-Chief with Ive. Ive's free reign in Apple design has run its course. We need some new fresh ideas and designs that stand out in the market. As much as I hate the practical aspect of the Samsung S7 edge, I do appreciate the risk they took. Apple needs to take more design risks.
New Mac Pro?
I know you think the stock is undervalued, but dude. We almost all do. I agree with a coule points like cloud & such, but a lot of these things will never happen.
But back to design risks, Apple tends to do that with new products, not established ones. iPod shuffle without buttons. Candy iMacs - I mean iMac computers! The cube. Mac Pro shaped like a trash can. The iPhone itself was a risk, but they're not going to get too nutty with an established powerhouse. I think the Watch was another such design risk. It will evolve over time and when the time comes, will probably explode. Apple operates slowly and deliberately and they've always done fine. Cmon man, you know this.
Comments
You should email this to Apple's PR team or directly to TC.
(BTW, I do think Apple already has a private security force. Didn't they pay a visit to some guy a couple years back who was suspected of having an iPhone prototype, and following up a little later with a few off-duty police officers in tow as ride-alongs?)
I still own Apple products. Many of them including 4 iphones, 3 Mac's and 5 ipads. I for the most part "like" the products. I used to LOVE all of them. Lately I've been seeing too many bugs, quirks and issues with the software. I'm not excited about the new hardware relative to what I already own. I don't own a watch but was hoping apple would give me some reason to buy one. I'm a gadget freak and if it had marginal value I would get it but I don't see it.
I also am growing tired of apple's pricing on hardware in terms of their memory storage scheme. Anyone can see and agree that it is structured for profits, period. That doesn't work well for me. Storage memory costs them bupkis but they gouge consumers on it with all their products. Not cool.
Last I hate the closed wall BS they do. I don't want my photos bundled up into one large Photos database in a walled garden. I want them out in the open in a filesystem any program or browser can access, read and manipulate. This was clearly done to wall people in or keep other apps out from accessing photos. There is no fundamental reason not to have the photos in the filesystem. Unix systems can handle this EASILY.
So I'm not long or short the stock now or any options on it. Been 100% out and enjoying the drama free time these last couple years. I am looking to possibly go short some PUT contracts if the stock hits 85. I would consider writing a 70 or 75 strike PUT out to January 17. Get a few bucks for it and if the stock is PUT to me I own it for a few bucks under the strikes. If not put to me I just keep the premium. Free money.
But the winning dopey comment is "Hard to believe the stock is worth LESS than in 2012". In June of 2014 Apple did a 7 for 1 stock split. Do the math.
You seem to think that there is a direct relationship between Tim Cook and the share price. As Icahn said, China was his primary reason for cashing out. I don't think he is being disingenuous. It may not be entirely the Chinese government but certainly the Chinese economy is not helping matters. There are many contributing factors that affect the share price, not the least of which is the slumping worldwide economy, strong dollar, smartphone saturation in the the US/Europe as well as wars and the threat of wars, sanctions, the pending election, etc. The FBI case didn't help either. It is not all Tim's fault.
You say that he wasted $115 B but for all we know, the buyback may have actually shored up AAPL share price from an even worse fate given all the other external pressures. As you yourself have argued, the iPhone 6 blowout was a one time event.
Apple has much smarter financial experts than you. If you don't like their decisions, as a shareholder, you have a vote. You can also vote by selling your shares. If you buy high and the stock drops, that is what is known as risk. Shit happens. Deal with it. Whining on AI isn't going to get your investment back.
I know you think the stock is undervalued, but dude. We almost all do. I agree with a coule points like cloud & such, but a lot of these things will never happen.
But back to design risks, Apple tends to do that with new products, not established ones. iPod shuffle without buttons. Candy iMacs - I mean iMac computers! The cube. Mac Pro shaped like a trash can. The iPhone itself was a risk, but they're not going to get too nutty with an established powerhouse. I think the Watch was another such design risk. It will evolve over time and when the time comes, will probably explode. Apple operates slowly and deliberately and they've always done fine. Cmon man, you know this.