Apple: Is Tim Cook Telling Investors the Truth?
Apple's entire call was fantastic. It's absurd the stock tanked on such a solid quarter and best-in-breed guidance, but you were warned . What happened should not come as a shock.
However, tucked into the specifics was a Balsillie-like vagueness from Cook we never would have received from Steve Jobs.
I remember listening to RIM calls where Balsillie imprecisely quantified Blackberry Playbook demand. With 5th grade comprehension skills you could have sniffed out the trouble at RIM. It was apparent. Nobody cared about the Playbook, Balsillie knew it and he was floating overly-optimistic and wholly random numbers.
While Apple, as usual, delivered plenty of specifics, Cook's contention that the product pipeline is "chock full" of "incredible stuff" concerns me. I wasn't expecting a product announcement, but I wanted something that inspires confidence. It was great to hear that Apple will not slap its logo on some random product just to generate revenue, but why bring up the "product pipeline" at all if this is all you have to say about it?
By doing this, Cook flashes a sign of weakness. He's clearly attempting to allay fears. That's not good. If it's not a problem, why even acknowledge it; simply let the obvious assumption that Apple has innovation up its sleeve stand better left unsaid. The way Cook pulled off that line made me less confident that he actually has anything of meaning -- something other than refreshes, cosmetic changes and evolutionary tweaks to current products -- locked and loaded.
But this comes as no surprise. Harken back to an article I wrote in May 2012 -- Sell Apple, Buy Amazon -- where I questioned a Tim Cook-navigated Apple:
When Jobs was alive, investors were afraid he was going to die. Now that he's gone, he's no longer here. And that's even worse. What else could explain the rapid surges and equally as swift pullbacks Apple has experienced over the last year or so? Sure, you can blame market manipulation conspiracies, hedge funds, mutual funds profit taking, the broader market, the economy, the rumor mill or sheer stupidity, but these excuses do not cut it. It's all about investor confidence.
Investor confidence in Apple's future. It was there with Jobs. It's there at Amazon.com (AMZN) with Jeff Bezos, but it's clearly not there with Tim Cook as Apple CEO. Cook just does not display that Apple swagger I spoke of while hanging at the Apple Store in Santa Monica over the weekend.
That's the core problem at Apple. Do I think it should dog the stock as much as it does now? Absolutely not, but what I think -- no matter how rational it is or how much AAPL bulls want it to be true -- cannot break this bearish trend. Only Tim Cook can, but he has to produce fresh results.