For all the Apple is doomed memes and this would never have happened under Steve Jobs considerations, one thing must be made perfectly clear about Apple in the 21st century. Apple today is not Steve Jobs’ Apple.
Change is the fundamental nature of any good business. Nothing improves without change. Apple is undergoing fundamental changes that are more in the image of CEO Tim Cook than the vision and DNA from Steve Jobs.
From his return in mid-1997 to his death in 2011, co-founder Steve Jobs Apple upended and revolutionized a number of tech industry standards. iMac. Apple Stores. iPod and iTunes Music. iPhone and iPad. App Stores. In the past seven years, CEO Tim Cook’s Apple launched iterative product improvements across the product spectrum and… insert my famous drum roll here… launched a bunch of iPhone accessories.
That’s correct. Accessories to Jobs’ iPhone. Apple Pay? An accessory. Beats Music and headphones? Accessories for iPhone. Apple Watch and AirPods. Accessory, and accessory. Tim Cook is the technology accessory king. Instead of using Apple’s riches to invent the next great thing, Cook’s Apple has invested huge sums in R&D to improve products, yes, and to create new disruptive accessory products (Watch and AirPods).
Apple products have a gross margin that is, well, relative to competitors, gross. Grossly exaggerated. How so? Perhaps it is the grossly expensive product line made even more expensive with Apple’s new iPad Pro models, MacBook Air line, Watch Series 4, and iPhone Xs Max. Yes, all are lust-worthy, drool-worthy technology gadgets to desire, but instead of expanding the customer base with more affordable offerings, Cook’s Apple seems content to own the premium end of each product spectrum.
Instead of expanding the customer base, Cook’s Apple is content to dish out tens of billions of dollars in undeserved rewards to shareholders via dividends, and to buy back stock in a seemingly vain attempt to prop up shareholder value. What have shareholders done for Apple?
Should Investors Worry About Apple Stock After Disappointing Q4?
No, of course not. What was disappointing? Apple’s guidance for the next quarter? iPhone’s flat sales? Those are not new themes and have been going on for a few years already. Apple’s executives know about smartphone saturation and have structured the iPhone platform accordingly. How so? Milk the customer base for all it’s worth. Higher prices. Tim Cook is shrewd. Gone are the days of heady growth year over year. Gone are the days of unit sales numbers for iPhone, iPad, and Mac.
Apple’s competitors never gave out such numbers and Apple can afford to keep such statistics internal, too. Clearly, Apple owns the premium end of each product spectrum and, vis-a-vis competition, Apple owns the lion’s share of revenue and profits in each major product category and despite the legions of doom in the technology market press, the company is in no danger.
Relative to Steve Jobs’ Apple, Tim Cook’s Apple is rich beyond Jobs’ imagination and still delivers lust-worthy and drool-worthy products that I’m sure Apple’s co-founder would be proud of, even if he were disappointed that his company has yet to invent the next next great thing. Just remember the basics. Nothing improves without change. For better or worse, Tim Cook’s Apple is no longer Steve Jobs’ Apple.