If There’s Facebook Fatigue, Twitter Fatigue, Google Fatigue, Could We Suffer From Apple Fatigue?

More than a small number of my friends have admitted to suffering from a bout of Facebook fatigue. Those endless posts to the wall require attention and time, and it’s becoming clear that Facebook use may be as much addiction as anything.

What about Twitter? I see a similar fatigue taking place. Most Twitter users are followers, not tweeters, and it doesn’t take long to follow dozens and dozens of tweeters– celebrities, sports figures, politicians, pundits, stores, news outlets– all of whom apparently have nothing else to do but tweet trite banalities in 140 characters.

There’s already Google fatigue, whereby users of Google’s free services recognize they’re a product of Google, not a customer, and worry about their online privacy. Google distributes the Android OS for smartphones and tablets primarily to get users hooked on their free apps so that personal data can be tracked and sold to advertisers.

Is it possible that the masses are also contracting a touch of Apple fatigue?

Two points in time have intersected which may be the cause of the sense of fatigue we feel when dealing with Apple’s seemingly many enemies and detractors.

First, Apple hasn’t released any new or earth shattering, disrupting products in awhile. That lag breeds a bit of apprehension, which turns into boredom. Media doesn’t thrive on boredom.

Second, because there’s nothing new to report, tech media pundits, market analysts, and Apple critics have multiplied their journalistic excretions to ever higher toxic levels.

Those of us who follow Apple are forced to set the crooked records straight wherever possible, but it’s difficult to keep up because the aforementioned are really full of themselves. That effort causes fatigue, too.

Life would go back to normal again if and when Apple releases a few new products that disrupt the natural flow of a staid old business segment. In fact, Apple CEO Time Cook all but promised a truck load of new Apple in the fall, just before the holiday shopping season.

That’s great. But that means it’s going to be a long, hot summer.

9 Most Damaged Brands

More lunacy from MarketWatch in the 9 Most Damaged Brands In The U.S.:

The Top 5:

  • J.C. Penney
  • Boeing
  • Hyundai
  • Apple
  • Martha Stewart

Putting Apple at #2 on a list with J.C. Penney is lunacy and simply highlights that MarketWatch is officially a hit whoring digital rag instead of a credible site for business analysis.

They Can’t Get Bigger

This is the list where CEO’s would prefer not to see their company. Doug McIntyre and Nine Famous Companies That Can’t Get Bigger.

The Top 5:

  • Lockheed Martin
  • Dell
  • Proctor & Gamble
  • Hewlett-Packard
  • AT&T

Apple isn’t on the list.

Thoughts On Apple’s Future And The Tim Cook Era

The theory of relativity certainly applies to Apple these days. Relative to the performance of most other technology companies, Apple’s most recent quarter would have to be considered stellar. Name a company that wouldn’t love to trade financials with Apple.

Relative to Apple’s own past performance– stock price, growth, margins, et al– Apple could easily be considered an anemic company. It’s not, of course, but you’d never know it from the blind leading the blind on Wall Street.

What we’re seeing now is the transition of Apple from a high-flying financial performer tearing into new markets with a vengeance, to a kindler, gentler Apple, a company with less bravado and hubris and with a little more maturity. Steve Jobs said, ‘Stay hungry.’ Is Tim Cook a hungry CEO?

By this fall, when Apple rolls out new products, a new version of iOS and OS X, and a new category buster (hinted at but not divulged), the company will be more Tim Cook than Steve Jobs.

Depending on who’s doing the math, Apple’s iPhone and iPad are losing marketshare to the cheap plastic versions carrying the Android bacteria. CEO Tim Cook said not to expect anything new from Apple until fall, but he did use the word category to apply to a new product line. iWatch? iGlasses? iHelmet?

Apple’s financial guidance, always on the conservative side, has not been this conservative for years, and includes the potential for a drop in revenue, year over year. Apple’s profit is declining, too, down year over year. Why? Margins are also down while expenses are up, so the math is basic.

Apple makes much less money on the hot selling iPad mini vs. the iPhone 5. Still, Apple makes so much money that it has been forced to borrow money to buy back stock, and upped the dividend to shareholders.

I ask this. ‘Why bother?

Why even bother with a dividend or a stock buyback if the stock stays buried under the hammer of destructive emotions? Apple is in a transition period, moving away from the company Steve Jobs built to a company more in line with Tim Cook’s image. By this time next year Apple will be completely reshaped by Tim Cook.

So far, I don’t like the shape.

Here’s What The Changing Of The Guard At Apple Really Means.

Not Something Shareholders Ever Want To See

Regarding Apple’s recent financials, dividend increase, a stock buy back program, Chris Ciaccia in The Street:

Apple’s cash hoard is outweighing its innovation and product pipeline right now, which is not something shareholders ever want to see, no matter how short-term in nature Apple might want to spin it. At the very least, it should buy Cook and his team time as Apple tries to restart the growth engine.

Starting with new products this fall, two years after Steve Jobs died, Apple will belong to Tim Cook. The clock is ticking.

Good, Not Great

Reuters reviews the Samsung Galaxy S4 with quotes from around the tech media world.

David Pogue, NYT:

The Galaxy is still a beautiful, high-horsepower Android phone, but basically, it’s an updated Galaxy S3. If this were Apple, who adds the letter S to denote a slightly upgraded model (“iPhone 4S,” for example), Samsung might have called this phone the Galaxy S3S

Walt Mossberg, AllThingsD:

It’s an evolution of the prior model and despite some improvements, it still is especially weak in the software Samsung adds to basic Android. I found Samsung’s software often gimmicky, duplicative of standard Android apps, or, in some cases, only intermittently functional.

Adrian Covert, CNN:

This isn’t a phone that’s going to convert an iPhone user, and current Galaxy S III owners aren’t going to miss out on a whole lot as far as features go.

Christina Warren, Mashable:

After spending about a week with the Galaxy S4, I feel it is not only the best Galaxy product to date – it’s one of my favorite Android smartphones ever.

Yours truly on the Galaxy 3S launch:

What we’re actually seeing with Apple, Samsung, Nokia, BlackBerry, HTC, et al, is iterative feature creep, not a quantum leap in the interface, usability, or capabilities of the modern smartphone.

What He Said

The best explanation yet for today’s technology ‘journalism’ from Macgasm.

When I learned to be a journalist, we had one rule: We did what was the right thing for the readers. That sometimes meant annoying companies like Apple, if “doing the right thing for the readers” meant giving them details of an unannounced Mac. Sometimes it meant giving large advertisers bad reviews. But whatever it meant, it always meant giving them the truth: facts we found out, put into context so the readers could understand what was going on better.

What he said.

Thinking Different: Apple’s Floating Dividend

Apple’s stock price is ridiculously low, especially when compared to the company’s financial results. Shareholders are calling for the company to buy back stock while it’s in a depressed state, and to increase the company’s dividends to shareholders.

I have a better idea. The floating dividend.

Tie the dividend to the stock’s price. For example, instead of issuing a $3 per share dividend, issue a $1 per share dividend when the stock price rises back to $500 a share. Then, add another $1 dividend when the stock reaches $600 a share. And, another $1 when AAPL touches $700 per share.

What if the stock drops below the aforementioned thresholds?

No dividend for you!

Legalities aside, the impact would be immediate, albeit somewhat cyclical in nature. Apple could set a maximum and minimum price on the stock. When the maximum is achieved in a given calendar year, a $1 per share dividend would be issued. If the stock drops below a minimum level, no dividend would be issued.

Should annual profit drop below a specific threshold, no dividend would be issued. Likewise, when cash on hand goes above a specific threshold, the dividend amount could be increased.

Microsoft’s Steve Ballmer has headed the company for about 10 years and the company’s stock price remains mostly flatlined. Yet, Ballmer’s financials over the same time period are quite similar to those of Apple under Tim Cook.

For Ballmer:

Annual revenue at the company has grown 221 percent, to $73.72 billion, and profit has jumped 80 percent, to $16.98 billion.

For Cook (in less than two years):

Annual revenue has grown 45 percent, to $156.51 billion, while profits have jumped 61 percent, to $41.73 billion.

Shareholders and analysts want a company to jump through arbitrarily high hoops. Why not have the shareholders jump through a few hoops to be rewarded with a dividend?

Steve Ballmer’s Advice To Tim Cook

Nick Wingfield in The New York Times on ‘Why Tim Cook Is Like Steve Ballmer.’

For many investors, Steve Ballmer, the chief executive of Microsoft, has long been one of tech’s favorite villains. His company’s stock has lost 43 percent in value since he got Microsoft’s top job on Jan. 13, 2000.

However, the company’s financials paint a different picture.

During the 13 years Mr. Ballmer has led Microsoft, though, annual revenue at the company has grown 221 percent, to $73.72 billion, and profit has jumped 80 percent, to $16.98 billion.

How does Ballmer feel about Microsoft’s stock price?

Whenever he’s asked about the company’s poor stock performance under his leadership, Mr. Ballmer typically says there are two Microsoft numbers he is most concerned with — profit and revenue. The share price, he usually responds, is outside his control.

Tim Cook should take heed.

Bizzaro World

Yours truly on Mac360 regarding the source of all the negative news about Apple.

To those tech pundits and bloggers from Bizzaro World, Apple is the perfect company. Apple makes beautiful products that make customers happy. How can anyone from Bizzaro World stand for that? It’s a crime to them.

And, a logical extension and conclusion.

Doesn’t it appear to you that many elected representatives in government are from Bizzaro World? They’re completely intent upon following the Bizzaro Code to do anything that’s the opposite of common sense or the will of the people.

Apple’s Crazy Drive Down The Misinformation Super Highway And The Speed Bumps To Avoid

I worry about modern society. When the internet went public barely a generation ago, it was heralded as the information super highway. Well, it’s not. It’s more like a misinformation super highway. The perfect example of how information moves quickly but gets mangled and distorted in the process is anything that resembles news about Apple.

Here’s the problem. Apple is a big company with hundreds of millions of customers, plenty of money in the bank, a cache of innovative and industry-changing products, and that makes it a target for anyone and everyone willing to distort fact or create a fictional replacement.

Why? The who, what, when, where, and why of facts are boring. Fiction and controversy sells newspapers. Alright, newspapers are dying dinosaurs, but yellow journalism is not. It’s alive and well and prospering on the internet where a clever but false headline can spread like wildfire, sufficient to cause a raging river of emotion to overflow, and a high flying stock to tank for no reason.

That’s what’s happened to Apple.

In just the past two years Apple’s stock has gone from riches to rags; once a darling, now a dumpster. How so? The stock market operates on emotion. Information from the internet seems to operate on emotion, too. Apple’s stock has been pummeled by 18 months of negative headlines, few of which are based in fact, most of which are pure rumor, innuendo, and mostly unsubstantiated.

I have friends, some of them who work on Wall Street, and many who own Macs, iPhones, and iPads, and they ask the same questions.

What can Apple do to survive? When will the company get rid of CEO Tim Cook? How did Apple let Samsung become the innovator?

With customers lining up to buy iDevices, and with $150-billion in the bank, Apple’s financials and prospects are the envy of every competitor, yet pundits and so-called journalists say Apple should be more like Samsung if it wants to prosper.

What evidence is there that Apple is beleaguered? The stock price?

Historically, Apple goes through two basic stages of a product’s life. Innovation and iteration. First, a new product hits the streets that is quickly criticized by critics (it’s what they do). Second, customers line up for a few years to buy said products, while Apple iterates each version, carefully polishing and honing the details that make customers love it even more.

The misinformation super highway can be friend or foe, a long stretch of highway where Apple blitzkriegs through an industry, or a parking lot of speed bumps that shakes the Apple vehicle to the core.

Right now, the Apple shine is shaken, but not necessarily stirred. If Tim Cook is a good CEO, he’ll maneuver the company through the speed bumps and back onto the highway. If he doesn’t, Apple will continue to suffer at the hands of those who created the misinformation super highway.

We’ll know which road Apple is on soon enough.

How Samsung Ate South Korea

From the Independent in the UK. The headline says it all. ‘Tax evasion, bribery and price-fixing: How Samsung became the giant that ate Korea.’

For years critics have looked nervously on this growing empire, saying its money and vast influence was helping to corrode the nation’s hard-won democratic institutions. A series of scandals in the last decade led to the conviction of several Samsung executives for bribing politicians. In 2008 Lee Kun-Hee – Korea’s richest man – was forced to quit as group chairman and fined $100m after being convicted of tax evasion and breach of trust following an investigation sparked by the wiretaps.

He was pardoned a year later, and Samsung continues criminal activities unabated.

The Search For A New Cook

Gene Marcial goes the distance in Forbes and asks the musical question, ‘Is Apple Looking For A Replacement For CEO Cook?

Some Wall Street sources close to some Apple executives say such a move is afoot, although there’s yet no available evidence that the board of the once-mighty top tech-innovator is officially in such a game-changing mode.

Some, some, once-mighty, blah, blah, blah.

Pure link bait based on absolutely nothing. Apple has yet to deliver any numbers worthy of a CEO ouster.

On Apple: Why Would A Company With $150-billion In The Bank Need To Borrow Money?

Apple’s stock price has dropped nearly 30-percent the past year which has some Monday morning quarterbacks calling for the head of CEO Tim Cook on a platter. That’s a patently ridiculous notion, of course, because Apple’s financial fundamentals are strong. So strong that any one of Apple’s competitors would be happy to trade their numbers for Cook’s books.

Why does J.P. Morgan analyst Mark Moskowitz in Barron’s think Apple needs to borrow money?

In our view, we think that Apple could be on the brink of driving a major leveraging up. With the company’s cash pile growing and historically low borrowing rates, we think that investors should start to consider what the expanded cash uses could be if Apple takes on $15 billion, if not $20-25 billion, in unsecured debt in the near to mid term. Given the company’s strong operating profit and cash flow metrics, we would expect Apple’s borrowing rate to be 2.5% to 3.0%, which is much better than paying 25-30% tax on cash repatriation.

That’s a lot of financial gobbledegook for ‘it’s cheaper to borrow money than to pay taxes‘ while trying to repatriate profits.

Recall, 69% of Apple’s cash is held overseas. Overall, we think that a more shareholder-friendly capital allocation program could recast Apple to a wider range of investors… We estimate that the dividend yield in the “New Apple” scenario could increase to 4.0% versus 2.6% currently, and the stock repurchase activity could nearly double from current levels.

The hidden incentive behind the verbiage is ‘stock repurchase’ and hidden behind that is ‘more dividends’ for shareholders.

In other words, Apple has so much money sitting around that shareholders are clamoring to have Apple return some of it, but they recognize the debt penalty that could be incurred, so anticipate that Apple could borrow money to finance operations, and then ‘return money to the shareholders with a smaller penalty.’

There’s an assumption there that Apple must bring home those foreign profits to re-invest, buy stock, return shareholder money, and so on.

How about this? Apple should just sit on it. ‘Return money to the shareholders?‘ Seriously?

It’s not shareholder money. It’s Apple’s money. Shareholders did not give money to Apple. They bought stock in the hopes the stock price would go up. Instead, the past year it’s gone down, hence the growing unrest for Apple to repay shareholders with the company’s profits, even if the company needs to borrow money to do it.

These shareholders are not interested in Apple’s long term well being. They’re interested in a quick return on their investment, and when a stock dives, especially for non-financial reasons, the investment becomes more long term and needs a recovery to eventually reach a gain, and the market just can’t handle the need to be patient.

Maybe Apple should let the stock drop even more and then take the public company private.

Verizon iPhone Sales: Down 33%, or Up 25%?

David Goldman stacks the facts in CNN Money:

Either iPhone customers are growing savvier, or they’re starting to tire of Apple’s smartphone.

How so?

Verizon’s iPhone activations fell 33% in the first quarter, compared to the fourth quarter.

Uh oh. What happened?

Last year, Verizon’s first-quarter iPhone activations fell by 24% from the fourth quarter.

I wonder if two year contracts have anything to do with that?

The nation’s largest wireless carrier said it activated 4 million iPhones over the past three months, 2 million fewer than the 6 million it sold between September and December 2012

Yet a full 25-percent higher than the year ago quarter. That fact was buried deep in the article.

Verizon reported a 50.4% wireless profit margin in the first quarter, up sharply from its recent low of 41.4% margin in the fourth quarter. When it sells fewer iPhones, Verizon performs better — in the near-term, anyway.

Fewer iPhones translates into higher profits? That’s laughable and displays a lack of analysis of Verizon’s cost structure. If the profits are lower, why bother to sell the iPhone at all?

Volkswagen’s iBeetle

From Zach Bowman in AutoBlog, Volkswagen’s iBeetle.

In reality, the iBeetle offers little more than a dash-mounted dock and a special app that shows a few vehicle functions, which is about as far from an infotainment revolution as you’re likely to find. In fact, the setup is little more than a factory rehash of aftermarket items, and hardly worth a whole model debut at an international motor show. And that’s to say nothing of the fact that Apple relishes in changing the shape and form of its darling handheld at every generation. Volkswagen better be prepared to keep pace with appropriate docking mechanisms for the upcoming iPhone 5S, 6, 6S, et al.

True, that.

Where Are The Lines?

Darrell Etherington in TechCrunch on HTC’s launch of the highly touted One smartphone:

The HTC One, the Taiwanese company’s flagship smartphone device, goes on sale today across the U.S. at retail stores including AT&T, Sprint, Best Buy, Walmart Target and more, as well as online via those retailers, HTC itself, Amazon and beyond. The phone has already been highly praised by early reviews and anyone who seems to have gotten their lucky mitts on one…

And…

The One, which is as significant a break from tradition in terms of how Android smartphones are designed as any we’ve yet seen, is the company’s big bet to turn things around, and they appear to have spared no effort.

Nice phone, plenty of good press, lots of advertising, so where are the lines of customers waiting to buy?

Who’s To Blame? Apple? Or, Microsoft?

Yours truly on Mac360 regarding the post-PC era and the death of the PC:

I won’t give Apple all the credit for the demise of the PC (which hasn’t actually happened yet, and probably won’t), but the company certainly heralded the post-PC era with iPhone and iPad. Still, Microsoft deserves some kind of credit for shooting themselves and the entire PC industry in the foot. Twice.

The Lies, Damned Lies, And The Reality Of Statistical Analysis Of Apple’s Low Cost iPhone

Here’s a shocker. Apple needs a low cost iPhone. Here’s another shocker. Apparently, the low cost iPhone is already here and we’re just not paying enough attention to figure it out.

Most of the tech media pundits have been clamoring for Apple to product a lower cost iPhone or cede the bottom of the food and profit chain to Samsung and other Android smartphones. In fact, hardly a day doesn’t go by without a headline about Apple’s upcoming entry-level iPhone.

Does the math really support an iPhone with a lower price tag?

So it would seem if Verizon’s latest smartphone sales numbers are an indication of what’s actually happening in the real world where customers buy products. Verizon sold 4-million iPhones in the most recent quarter, an increase of 25-percent. That’s all well and good, but get this.

The iPhone 5 made up only half of the 4-million units sold, and just over half of all Verizon smartphone sales. That means the other half of the iPhones sold last quarter were iPhone 4, and iPhone 4S– the iPhone models with lower prices. Lower. But not much lower.

An iPhone 5 on Verizon is priced $100 more than an iPhone 4S with a two year contract. The 8GB iPhone 4 model, which is over two years old already, is priced $99 less than an iPhone 4S. As in zero cost.

Spread out over a two year agreement, the iPhone 5 costs just over $8 a month more than the iPhone 4, which, in turn is barely $4 less than the iPhone 4S.

That’s crazy. Apple is selling as many iPhone 4 and iPhone 4S models as iPhone 5 models (on Verizon’s network), though the most recent iPhone is faster, lighter, better in every respect. $8 a month difference between the old model at the low end, and the most recent model at the high end.

That’s barely a trip to Starbucks.

If anything, Verizon’s numbers point out that people either don’t perceive much difference between iPhone models, or even a few dollars a month is a big deal in a bad economy. Judging from those numbers I’m inclined to believe that Apple might game some additional sales with a second tier iPhone.

That seems to work in the U.S. where price is an object. Or, put another way, many smartphone customers would rather have an old iPhone than a new BlackBerry, HTC, Droid, Google, or Samsung smartphone.

A Sign of the Times

Chris Ciaccia in The Street:

Verizon said it activated 4 million iPhones from Apple in its first quarter. The good news is that’s 25% increase compared to the same period a year ago. The bad news is that people are still flocking to older phones.

Only half of the iPhones sold by Verizon were iPhone 5s.