Breaking News: Apple Shares Still Down 5 Percent


Sep 17, 2013

Written by Mary Buffett

When it comes to creating hype and buzz, no company could do it with as much scientific precision as Apple. Whether it was Steve Jobs introducing the original Macintosh or at the end of countless presentations when he pulled the first iPod out of his pocket, many of Jobs’ presentations still resonate as popular fare on YouTube.

However, buzz and hype is a fickle beast that can easily backfire and quickly devour its messenger. That was another tough lesson that Apple CEO Tim Cook seemed to endure after a rough week when he introduced two lower-priced iPhones, noteworthy for its fingerprint recognition instead of using a password.

The stock price took a 5 percent hit after Tim Cook’s announcement.

The chattering classes pounced quickly and demanded even lower prices for the iPhone 5S and 5C. Worse, some commentators wondered if the iPhone’s new signature fingerprint password might signal a pathway to something more ominous, in light of Google’s relationship with the NSA.

The big question people have asked is this — has Apple run out of ideas? Even in this week’s The Onion, there was an article on Tim Cook’s being out of gas. Is Apple bereft of ideas? Of course not. However, is Apple at a crossroads? Maybe.

From 1995 until 2010, no American company stood conventional wisdom on its head more often than Apple. As the quirky brand rose in the 1970s, fell to earth by mid 1990s, and was rescued by its co-founder until he fell ill, these product launches were events unto themselves. As his health ebbed, rumors of Steve Jobs condition took equal billing to the products at center stage.

Did Jobs invent all of these game-changing tools we take for granted today? Of course not, but he cajoled and bullied people over things he loved and emotionally crucified those he labeled “bozos.” As a result, those products became embodiments of all that Jobs stood for. As Cook became CEO, there were long conversations with Jobs about the future. Supposedly, there was a huge cache of products in development but where are they?

Because of the past announcements, expectations are always high. The analyst community and chattering classes expect these presentations to be like Christmas morning and will become angry and disappointed if they receive socks and underwear.

The question remains — and this is something that I’ve discussed before — can Tim Cook help champion transformative products at Apple, or is he merely the executor of Steve Jobs’ corporate last will and testament? After three years on the job, the products released by Apple still appear to have the imprimatur of Steve Jobs on them. There are no “Tim Cook” products from Apple yet.

In one sense, Apple is the victim of its own success. When it comes to exceeding expectations in these product launches, it becomes harder and harder to top oneself. Like I have said in the past, when the expectations are unreasonably high, not living up to those unrealistic expectations can have its own odor of failure. When Jobs returned to Apple, the company revolutionized the Internet, music, book sales, and finally telephony; it was the one company who could bring it all together. However, after Tim Cook made his announcement about the new products last week, the stock tanked.

Some may conclude that Apple’s best days might be behind them. However, I disagree.

How ironic that Cook, the guy who always cleaned up after the latest Steve Jobs outburst, the one who assuaged the walking wounded, the one who stood in for Jobs as his health woes mounted is somehow perceived as an empty chair leading Apple in a post-Jobs era. With Jobs, regardless of his demeanor, he always had a pied-piper quality about his presentations and you felt like you were along for the ride. The role of Apple CEO is half philosopher, half king. Perhaps that’s why CEOs John Scully, Michael Spindler, and Gill Amelio failed.

I happen to think that Tim Cook has both qualities — half philosopher, half king — and perhaps more. He has excelled in a pressure-cooker environment, is loyal to product development, and has a top-flight senior staff. He understands the legacy of Apple and further understands how to summon the “power of cool.” We just haven’t not seen it yet.

So my message to Tim Cook is this: “Wow us.”

Disclaimer: Mary Buffett has owned Apple Computer stock.

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