The stock market has spoken. “Dear Apple, where you’ve been is not where you seem to be going.” The market, emotionally driven as it often is, reliant more on a flimsy roadmap of the future than a tried and true formula to bring in riches the old fashioned way (earned by revenue and profits) has spoken. “Show us the future!”
Buy The Roadmap
Every major company that competes with Apple in PCs, smartphones, tablets, television, and other electronic goodies does one thing that Apple does not do. Google, Samsung, Microsoft, Netflix, et al, are not afraid to show off a roadmap to the future.
True, Apple has delivered more future than all those companies put together, but that’s not what Wall Street investors want. Like voters, investors want lies! They want the red meat of a roadmap that smacks of boldness and greatness and risk, a product and future roadmap that speaks to the glories of days gone by, but reapplied to the future. Investors want a roadmap that says not only where a company is, but where the company will be, and how cool it will be once we get there.
Sadly, that’s not Apple.
Apple’s roadmap of the future is a giant milking machine, a technological echo of Steve Jobs roadmap prior to his return to Apple.
If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.
That’s exactly what Jobs did upon his return. He milked the Mac for all it was worth, and got busy on a line of next great things. Apple Stores, iPod, iTunes, iTunes Music Store, iPhone, iPad, App Stores.
What is Apple’s roadmap to the future, circa 2016? Thinner, lighter, faster Macs? Thinner, lighter, faster iPhones and iPads?
Jobs after his return to Apple:
Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.
The stock market loves performance so long as performance can be measured as growth; revenue first, profits someday. Otherwise, the stock market loves that mixture of growth with products that test the limits of a market; products that disrupt the industry (which may explain why AAPL gained so much while the iPhone ruled as a growth machine, but lost so quickly when growth stalled, peaked, and began to fall).
The stock market rewards bravado, too, an ingredient that seems lacking since Jobs’s death. Amazon gets applause for losing money, applause for failed products, applause for venturing far beyond delivering goods overnight. Witness Amazon’s efforts at competing with traditional video content. Witness Amazon’s very public failure to sell technology gadgets. Witness Google’s (now Alphabet) very public willingness to describe and build the future with Google Glass, the self-driving car, and home technology with Nest.
What is Apple’s roadmap to the future? Where is the vision that Wall Street so values? Where are the risks that bring rewards? All that Apple does these days are variations on the same theme; milking the Macintosh, so to speak.
Alas, Apple is no longer Jobs’ Apple. The company belongs to Tim Cook now, and is it any wonder that the stock market sees a similarity in Cook to Apple CEO’s of yesteryear?
John Sculley ruined Apple and he ruined it by bringing a set of values to the top of Apple which were corrupt and corrupted some of the top people who were there, drove out some of the ones who were not corruptible, and brought in more corrupt ones and paid themselves collectively tens of millions of dollars and cared more about their own glory and wealth than they did about what built Apple in the first place — which was making great computers for people to use.
Cook has spent tens of billions to buy AAPL stock only to see the value drop below the purchase price. Apple’s CEO has spent tens of billions on dividends to greedy investors while dropping R&D investments to new lows (as a percent of revenue). The result? An indecipherable product roadmap. Apple TV and Watch are variations on a theme; products that are more accessories to current products than an example of a company with its sights firmly fixed on a roadmap to the future.
Apple’s product roadmap to the future actually looks like the road that got Apple to where it is today, and the stock market isn’t buying any more tickets in that direction.