Apple - How to Disappoint both Consumers and Markets

As a long term investor in Apple — I bought my shares back when they were trading at $26 before the 2 to 1 split; which, means $13 of today's shares — I have been writing periodically about the company, Steve Jobs, and more recently, the incompetents who have taken the leadership positions at the firm, including Scott Forstall (thankfully, he was let go not long ago) and Tim Cook, ex-bean-counter trying to take the genius and visionary seat left empty by the late Steve Jobs.

Back to when Apple was trading near its all time high, I wrote AAPL at New All-Time High While The Internal Destruction of Steve Jobs' Legacy Has Begun.

So, what has happened? Let's ignore the markets for a moment, as the share price doesn't tell anything about how the good a companies products are. Let's focus on the products then:
  • The share buy-back plan announced when the share price was in the $600s... How clever does that look now that it's in the low $400?
  • The new iMac
    • It's basically the same old iMac stripped off it's optical drive and packaged in a much nicer design, but as with the iPhone, its design too far to difficult and expensive to produce. That's exactly what happens when there's no one to reign in genius designers with no commercial understanding. 
    • Not only is it difficult and costly to produce, a major commercial mistake was committed by announcing it in August/September and not making it available until late December. In the meantime, no pre-orders were taken and the old iMac was taken out of the picture. So not a single iMac was sold for almost 3 months! Yet, in case nobody at Apple saw that coming... they blamed low Mac sales on the supply iMac issues!
  • The iPhone 5
    • The iPhone 5 is flawed the same was that the iMac is: extremely difficult to produce, and expensive due to its base materials. In addition to that, it's plain ugly, and it lacks any killer feature to get people to upgrade. So basically, since the iPhone 4 (where the retina display itself, was a good reason to upgrade) there has been very little innovation made to the iPhone, only pushing the limits of what was already there. That's not the area were Apple used to strive, that was Microsoft's domain!
    • Apple still refuses to create different screen sizes, yet, many people would prefer a larger display, even though the one person in charge of the iPhone's design might disagree.
  • The Maps fiasco
    • Why did Apple need to go in the Maps business? Specially when there is not a single dollar of profit coming from it?
    • Even though Apple wanted to go into that business, it was too arrogant to buyout a struggling Nokia or even TomTom. We can do maps better than anyone, and beat something Google has been refining for 9 years, in 1 year. Major sin.
    •  In the end, Google Maps for iPhone is a killer. It's beyond any map apps, and it is really saving Apple's ass.
  • iOS
    • iOS has not been making any progress for quite some time now. Over the past 5 years, there has not been any real UI progress made on the iPhone, even though people have now been able to adjust themselves to touch screens and several interface widgets have now emerged as intuitive and successful, and are widespread (used in FaceBook and GMail and so forth). Such widespread widgets used by say 90% of the iPhone users should be embraced instead of suffering from the "not invented here" syndrome.
    • On my iPad, GMail, Chrome and GMaps have replaced Mail, Safari and Maps. They make more productive, are faster and work far better than the Apple's equivalent. The issue again is that Apple has lost its time implementing ridiculous UI animations and useless tools such as the PassBook and its shredder...
    • In addition to that, something I really don't understand is why Apple doesn't implement a shorter release cycles for the iOS apps it bundles. Google is, using the AppStore, pushing numerous versions very month, and making their tools better and better by the week. On the other side, Apple has created the AppStore but will update its own apps only with operating system upgrades. How silly! Google is really killing Apple using the limited set of tools and within the anti-competitive rules that Apple has set for the iOS ecosystem!
  • iPad / iPad mini
    • The iPad mini is a killer; and it's going at lower price tag than the iPad 2 which is still on sale. Who's going to buy that??
  • Mac OS
    • Yet again, no real innovation or revolution for several years now. It seems like most of the staff is now working on iOS.
    • They have made some horrible UI decisions with the Contacts and Calendar apps which make them unusable. So I now use Google Calendar and only contacts on the iPhone.
    • No updates to iLife or iWork since 2009...
    • Reverse porting things like launchpad to the Mac is stupendously stupid. They are not meant for keyboard+environment and do not fit in nicely.
    • Same for Aperture. So I replaced Aperture by the much better and nicer Lightroom.
While I was eager to upgrade my Macs and my iPhone, I was sorely disappointed and have since decided to not upgrade and wait & see... 

I use my iPad and iPhone mostly for:
  • Browsing (Chrome these days)
  • email (on my GMail)
  • maps on Google Maps
  • Bloomberg
  • Music on iTunes
  • Videos
  • books in ePub and PDF format
  • Trading tools
 Is there anything Android cannot do? So chances are, I'll buy myself an Android tablet and phone to try them out.

While it's easy to beat someone who's fallen on the ground now that the share price as fallen by about 40%, I don't think that's how this post should be perceived — after all, I saw that coming and started to beat up the management before Forstall was fired and near the all time high of the share price.

It's amazing how Steve Jobs was single-handedly driving this company. It's time for Apple to look into the mirror and see that they're only the shadow of what they used to be when Steve Jobs was in charge and either make the required readjustment, or end up becoming irrelevant like Microsoft has been doing for the past 10 years.

That said, I think the negativity about the stock is now very deep, and it's trading at close to 10x net earnings... So if profits don't start to fall (they are still on a positive slope, and rising), the share is good deal. One can wonder though just how much more the profits can rise with those incompetents as pilots.

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