This week, Apple reported results that would be the envy of any other company in technology—or, well, in any industry other than oil and gas. So, naturally, people are calling for Tim Cook to be fired. What other solution to this problem could there be, people?! Philip Elmer-Dewitt thinks there’s an orchestrated campaign; the Macalope doesn’t know if that’s true, though; he’s just here to shove some of these orchestra members into their instruments.
A solution in search of a problem
Over at Forbes, of course, they didn’t need to wait for Apple’s quarterly results to get the ball rolling.
Gene Marcial asks “Is Apple Looking For A Replacement For CEO Cook?” (no link for so, so many reasons).
Better questions Marcial should be spending his time pondering are, “Are space aliens living in my cupboard?” and “Is my toaster secretly whispering insults about me to my blender, behind my back?”
(That second one’s actually true. But it’s not like you can blame his toaster, right?)
You’ll be saddened to learn that the entirety of this piece is not a two-letter negative answer.
Some Wall Street sources close to some Apple executives say such a move is afoot …
Really. Because the Macalope has a hard time believing the clause “close to some Apple executives” is actually true. “Some Wall Street sources,” sure. But “close to some Apple executives”? Hmm. No.
They assert privately that it’s time for Apple to oust Cook. Under his tenure Apple shares rose to an all-time peak last September, but they have since been cut nearly in half. (Ed. Note: an earlier version of this piece mistakenly said Apple has fallen by half since Cook first took over.)
What a shocker it is that Marcial thought that and had to be corrected. Very surprising. The rest of the piece seems so spot-on.
[eye roll]
Their concern over what’s happening at Apple has heightened as there’s no sign that the bleeding will stop quickly.
THE BLEEDING. OH, GOD, SO MUCH BLOOD.
Now, the Macalope did not write “one of the most influential market columns” for “28 years” as Marcial so humbly points out that he himself did. But the horny one does know a thing or two about the English language and worked in business for many years, so he believes that traditionally the idea that a company is “bleeding” is because they are losing money, i.e. in the red. Back here on Earth, Apple’s humongous profits were down a bit year-over-year, and the company expects its third quarter to be flat compared to last year.
So, the horny one does not see this “bleeding” of which you speak.
Even [analyst Scott] Kessler concedes sales won’t be as robust from here on. He estimates that revenues in 2013 will rise about 14%, way down from last year’s 45% increase.
Apparently 14 percent growth is the new “going out of business.” For Apple, anyway. Amazon could report that it had accidentally shipped all of its customers live, venomous snakes and still be considered a winner.
So unless Apple CEO Cook announces something really dramatic in new products or astronomical earnings on Tuesday, the stock will surely decline even more.
Of course, Apple anounced neither of those and, as of this writing, its stock is up about 10 points from Wednesday’s close. But, look, people, you can’t make an opinion about Apple without breaking some reality eggs.
Apparently.
That’ll fix everything
Let the Macalope be clear here: Apple’s results were not stellar. Profit was down and the company has indicated that it’ll be a little while before it announces new products. That’s not great news. It’s also not cause to light yourself on fire and jump out the window.
Or, in the case of the steely-eyed corps of modern Apple analysts, try to light other people on fire and push them out of the window.
Writing for Yahoo Finance, Jeff Macke gives us the ugly truth about Apple’s numbers: “Apple: The Good, the Bad, and the Really Rotten” (tip o’ the antlers to Peter Dufault).
What happened to “ugly”? Does Yahoo Finance pay by the word or something?
Cook’s vague comments [about future products] caused Apple shares to drop 5% by the end of the call taking back all of its after hours gains.
Cook’s vague comments about future products caused that? Or Apple’s low guidance for the next quarter? Or sunspots? Or cats walking across the automated trading machines? Cats driven unknowingly but inexorably by sunspots.
Makes about as much sense.
“It was very disappointing, I think it’s time for Tim Cook to pass the baton,” says Jeff Kilburg, founder & CEO of KKM Financial and a CNBC contributor …
Let us assume, just for minute, that Cook should go. It’s ridiculous, of course, but let’s just assume that.
Who should he pass the baton to?
“Oh! Well, there’s … uh … Or, uh … no. Batman is not real. Phew. Hmm. Hey! You know what’s really great? Pie!”
Unfortunately, pie—given the current state of pie technology—cannot run the largest technology company in the world. As tasty as pie is.
Regardless of what Apple’s stock does in the near term, yesterday’s performance left little doubt that Cook is not only a pale imitation of Steve Jobs but a low-rent version of John Sculley.
Right. OK. Let us pause for a moment and reflect on why it was that John Sculley was ousted as Apple CEO all the way back in October of 1993:
In July Apple reported its worst quarterly loss ever, $188 million, and Sculley stepped down as chief executive …
…
Twenty-four hours before Sculley resigned Friday, the company reported a 97 percent drop in third-quarter earnings from a year earlier, to $2.7 million, among the weakest results in the company’s history.
This past quarter, Apple recorded its third highest revenue ever and, while profits were down year-over-year, its fourth highest profit ever.
So, this unfavorable comparison to Sculley is, quite simply, incorrect. But that’s not the only one that our fine pundit class is foisting on us this week.
Don’t force it
Writing for The Boy Genius Report, Tero Kuittinen sees a “Chilling deja vu as Apple starts to echo Nokia circa 2007” (tip o’ the antlers to Hugo Kessler).
Kuittinen is not a stranger to the pointy end of these antlers, having previously opined about how Apple was copying Samsung.
Oh, no, no, no, we are not doing this again. You can click that link, because it’s to the Macalope piece, but regardless, the horny one assures you that, yes, Kuittinen really wrote that.
You never tire of this game! Why is that?! Has the Macalope ever lied to you?
OK, once he said Rob Enderle was a kind of fish. (He’s really a lichen.)
Anyway, back to how Apple is now totes like Nokia in 2007. There is no simile so paper-thin that a talented tech pundit can’t make a big deal about it!
The strongest parallel is in the weird way both companies started fighting the consumer preference for larger displays at the peak of their profitability… and then dug in as margins began eroding rapidly.
Now, because you are one of the Macalope’s bright and accomplished readers, you will not be surprised to find that nowhere in this piece does he prove that more consumers actually prefer larger displays. There’s no doubt that some consumers do, but Apple continues to sell far more iPhones than Samsung sells Galaxy Notes. The larger Galaxy S4 may increase Samsung’s sales of mondo phones but, to date, more customers are buying phones smaller than 5 inches.
At the peak of its dominance in 2007, Nokia started fighting against the trend towards bigger displays.
Was that what the problem with Nokia was? The size of their phones’ display? Not really. The problem was the operating system and the capability and breadth of apps available for it. Saying it was about screen size is like saying the Civil War was about what color uniforms soldiers should wear. Yeah, screen size is related, but, at the time the iPhone’s larger screen size was a by-product of what differentiated it from Nokia’s phones.
Is there just a tinge of a Finnish accent blighting Cook’s smooth SoCal delivery?
SoCal? Is that what they’re calling Alabama these days?
So, to recap: Other than there being no proof for his contention that the struggling masses are yearning for aircraft-carrier-landing-deck-sized screens, and him totally making up things about the history of the smartphone market, and getting Tim Cook’s accent wrong, Kuittinen is completely right: Apple today is exactly like Nokia in 2007.