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Do We Still Expect Tim Cook to Make Waves?


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Tuesday, September 12, 2017

It's arguably the single-most important product on the global market, and it's about to celebrate its 10th anniversary at its company's keynote event today. Apple's AAPL iPhone changed the world a decade ago boldly, almost defiantly, under the leadership of its firebrand genius Steve Jobs and his take-no-prisoners method to conducting business. The world's largest corporation by market cap is about to celebrate this achievement with the unveiling of the latest edition of the iPhone, the iPhone 8.

Already this week, Apple shares are trading up in anticipation of the unveiling, which will include new and expected features such as wireless charging, a home button replaced with a digitized "button bar" and a 3D facial recognition scanner. The stock is trading up by a few dollars since this week's trading began yesterday; Apple is also up 8.4% in the last 3 months, 39.4% year to date and 56.6% year over year.

For more information on today's keynote event, click here.

Is this share price growth warranted? In some ways, sure it is: surprise growth in iPad sales last quarter helped boost investor interest in accumulating more shares (after all, who doesn't own at least a little AAPL?), a quiet surge of its Services business has been widening revenue streams from the all-important iPhone, and dividend yields continue to ratchet up. Not to mention the company has a mind-blowing $260 billion in cash and investments, giving Apple a literally unprecedented freedom in the global marketplace.

Yet… this company is not what it used to be. Tim Cook, who no one argues isn't a solid CEO, is no Steve Jobs. The "surprise factor" at these keynote events have lost nearly all impact they did prior to Jobs' death nearly 6 years ago. There are no new major innovations splashing onto the marketplace the way the iPod, iPhone and iPad did during Jobs' prolific final years, and the improvements made to products in existence have been tepid.

In fact, as a rather disappointed customer of a new MacBook Pro upgrade, I'm seeing something I had never before seen in an Apple product: middle-of-the-road (or worse) performance. Sure, the inconvenient updates continue - such as the new, smaller, more annoying USB port which currently requires an additional $75 adapter - but they don't come with a requisite improvement over competitive products in the field, the way they always did.

Apple used to far-outpace all other gadget-makers, which made investors fall in love with the company all over again, every new quarterly earnings beat and product unveiling. This no longer happens here. Tim Cook is not about to shock the world today; that we still hold out some hope that he might is behavior we would likely do well to correct.

Not that he doesn't have myriad opportunities to do so - more than practically any company on earth, in fact: with cash on hand, Apple could buy both Tesla TSLA and Cisco Systems CSCO and still have a spare $40 billion left over. But where is this cash more likely to go? A modest dividend yield increase. Better than a sharp stick in the eye, for sure, but far, far afield from what made this company the beloved American tech commerce giant its reputation still carries.

Mark Vickery
Senior Editor

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , US Markets , Stocks
Referenced Symbols: CSCO , TSLA , AAPL


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