Harshest critics misunderstand Apple

A lot of folks are in Apple-hate mode right now, and that says more about them than about the company's relative strengths and weaknesses in the smartphone market.

By TheStreet Staff Sep 16, 2013 12:29PM

Apple's iPad on showroom floorBy Rocco Pendola, TheStreet

 

If you're not concerned about Apple's (AAPL) long-term health and prosperity, there's something wrong with you. Simple as that. You're

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 either a fanboy living in denial or have yet to deal with some type of intellectual issue that impedes efficient cognition.

 

It's just not possible to conduct Apple discourse without bringing up Steve Jobs' legacy and the unlikelihood that Tim Cook can do it justice from some point forward.

 

But this doesn't render every move Apple makes today crappy and brainless. If, in your mind,  Apple can do no right, check yourself. There's a good chance you're committing the same type of injustice I chided Lazard Capital Markets' analyst Barton Crockett for committing a couple weeks ago. You have a conviction -- bullish or bearish -- but you filter out, gloss over or refuse to meaningfully acknowledge any data that counters it.

 

I can't claim to know what's going on inside the head of TheStreet's Doug Kass as he formulates the opinion that Google (GOOG) and, more specifically, Android, is an Apple killer. But I'd love to be able to peel the onion back a bit.


While Kass has been right more than wrong on the stock (he might be batting 1,000?), that disconnect between company and stock, between the big money's whims and reality comes into play when he writes:

Google, unlike Apple, understands the importance of market share; it is going to price this device at breakeven -- about $300 to 350 and less than half of iPhone D(ud) -- and that is going to be much higher spec'd (better and bigger screen, processor, battery and camera).
Google is simply more innovative. It develops a broader ecosystem that includes newer and cooler devices like Google Glass, in addition to handsets and tablets, with numerous partners. It delivers better products, and prices them more aggressively to take market share. Meanwhile, Apple lives in the past and tries to compete on the basis of hardware features much more than it has at any point in the past.

Quite a bit of that is subjective. A fair share is suspect (given its relative unavailability, Google Glass is a non-factor). But, once again, it's the market share comment that gives me the courage to go after one of TheStreet's biggest and most-respected names. On so many levels, Kass, like so many other Apple detractors, misses the point.

 

First, objectively speaking, the most recent comScore U.S. data show that, among smartphone operating systems, Apple, despite popular meme, is the only one actually gaining market share.

 

Between the quarters ending April 2013 and July 2013, Apple's market share increased by 1.2%, topping the 40% mark. Apple sits 11.4% behind Android, which saw its market share slip by 0.2% over the same people. BlackBerry (BBRY) continues to die a prolonged death, while Microsoft (MSFT), appropriately, is flat at a wimpy 3%. (Microsoft publishes MSN Money.)


But here's where the cognitive skills come in.


No. 1 by a (relative) mile

 

In comScore's ranking of the top smartphone OEMs (companies that make the hardware) Apple remains No. 1 by a relative mile. With a 40.4% market share, it's still growing and a full 16.3 percentage points ahead of second-place Samsung. Apple managed to grow without a new device. Samsung's share increased 2.1% over the same timeframe with too many devices to count.

 

You cannot look at the operating system and have a serious and honest market share discussion about Apple and smartphones. The OEM category provides a much more accurate, self-explanatory picture.

 

We could argue all day about "the importance of market share."

 

It's about as easy to achieve consensus there as it is to get a room full of Toronto Maple Leafs fans to agree on the team's goaltender strategy headed into the season. Do they give one guy the job and go with him all season or let James Reimer and Jonathan Bernier share the load? I could probably make an effective argument in either direction.

 

So I'm not saying Kass and others are wrong to argue that Apple should cheapen its brand and grab some low-hanging fruit. There aren't many among us -- Tim Cook included -- who don't think this approach would generate more market share for iOS.

 

But I guarantee you this, lots of folks are in Apple-hate mode right now. If the company came out with a truly "cheap" phone, a 5S in multiple colors with multiple screen sizes they would be getting hammered for risking margins and profit. With some people right now the company can't win, even when it is winning.

 

There's lots to worry about in Apple's future. But if you're calling the world's most popular smartphone a "dud" and suggesting it should cut prices by "$300 to $350" you're mistaking the here and now for a future that has yet to arrive.

   

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112Comments
Sep 16, 2013 1:39PM
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I don't understand how anybody would want to buy a $500+ electronic device without the ability to change the battery.
Sep 16, 2013 1:39PM
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To me, it seems this writer is the fanboy...
Sep 16, 2013 1:34PM
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It his a joke? Worthless hypocritical fan boy drivel. You mock what you are!
Sep 16, 2013 1:39PM
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Wow - what a non-article. Amazingly empty and devoid of anything but a love of the AAPL ticker.
Sep 16, 2013 1:40PM
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oh, Rocco, resident Apple fanboy, who can't cite his inaccurate figures, and is more subjective in an article ripping subjectivity than every other article ever (see what I did there?). If you can't look at an OS, only at a manufacturer, and you're ignoring most of the market (news flash: the US is not the largest or most important smartphone market), and you try to twist the numbers as much as you can, you can wind up with only being 11 points behind.  Interestingly enough, that cheap color phone that you hypothesize about is already up for pre-order.  The time on the article implies you posted this less than an hour ago, but I have trouble believing even you are that oblivious to the world. Finally, since Samsung has too many phones to count, let's count them.  They have the S4, S3, Note 2, and Note 3.  Surely, you can count to 4.  Apple, meanwhile, has the iPhone 5S, the 5C, the 5, and the 4S, all on the market, which comes out to - oh no! - 4.  I seriously wonder how you're still employed...
Sep 16, 2013 1:50PM
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There are people who believe apple can do no wrong and there are people who believe apple can do no right.  Both groups are a-holes who need a life.  It's technology, don't get emotional.
Sep 16, 2013 1:48PM
Sep 16, 2013 1:43PM
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BS:

 

Apple has and always will be the proprietary software and hardware stranglehold they are, there are a lot of Apple haters for quite a few reasons, one being that the hardware is really not that expandable compared to Android based systems, you have to "buy" an expanded memory version (note the term buy) when you can simply load an external SD card on Android phones.

 

So who do you really think your deluding? This article seems like a carefully contrived, and subtley texted way of taking swipes at what is rapidly becoming the dominating OS of the 21st Century, if Apple really wanted to remain competitive in this market they would create open source systems with external storage capability and less expensive apps.

 

Please, you have ITunes and the Apple Store. Android has what? 1Mobile Market, Google Play, Amazon, Slide Me, and Amazon MP3, the list goes on. I think you really need to take a good hard look at what is truly "competitive" and either market and license the IOS on other platforms, or keep going in this stagnant and ancient model of business and go the way of the dodo.

 

Its not about just features Apple, its about lots of other things like flexibility, open platform and SDK development, when you finally realize your iPhone 15 or whatever isnt holding water to the later offerings from Samsung, HTC and other makers, perhaps then you will realize your the dinosaur in the ever expanding world of mammals.

 

Sep 16, 2013 1:47PM
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I like apple products and am disappointed in the products that apple has released or is about to release.  And it has nothing to do with the price of the product.  it has to do with the lack of true innovation. innovating new products that people want rather than re-packaging the same old products and calling the final product new technology. 

How to stay competitive as a company.

New products, that no one has thought of, that the people want, is what keeps a company competitive, rather than re-manufactured the same old thing and calling the re-manufactured thing, new technology, and innovation for the sake of innovation is a waste of research and development money which also will not keep a company competitive nor does delaying the product release dates of products that have been announced keep a company competitive.
 
Sep 16, 2013 1:49PM
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To use the author's logic, the Mac "won" the PC wars because you can't count all the Microsoft OS PCs in one group due to the fact that they were all made by different manufacturers.  If this was the case, Apple wouldn't have nearly gone bankrupt before hiring Jobs back and putting out the ipod.



Sep 16, 2013 1:53PM
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Well, this was a totally one-sided article (no surprise).  For my consumer dollars as far as smartphones go I will take a Samsung over any iPhone, any day. I am not a fan of Apple products or operating systems in any way, shape or form. But, that is just my personal preference. I make my statement by simply not buying Apple products. I have used them and I simply do not like them. Again, personal preference.
Sep 16, 2013 2:02PM
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Wow, how much did Apply pay Rocco to write this article?  I don't think I can recall a worse instance of more bias, ridiculous, and unnecessary reporting. 

 

I don't buy Apple products and never have.  Reason:  They have the wealth of a medium-sized country and still can't find a way to do anything philanthropic with it.  I live in the Bay Area and read the SF Biz Times.  Every year they print the top 100 philanthropic corporations in the Bay.  I see Google, Yahoo, Dell.. everyone you'd expect.  Apple?  Never anywhere to be found.. not even in the top 100.  Until I see their name in that list, I won't even consider looking at Apple.  And since I love my Android smartphone so much, I doubt I'd buy their overpriced merchandise even then.

 

I've kind of been enjoying watching their stock slide. 

Sep 16, 2013 1:50PM
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"You're

 either a fanboy living in denial or have yet to deal with some type of intellectual issue that impedes efficient cognition". This comment sounds as though it comes from an individual completely and totally ignorant of the psychological assault on working americans by the corporate marketing/advertising machine. In other words tech marketing has permanently brain-damaged this individual. He probably loves his new I phone more than his kids.

Sep 16, 2013 1:53PM
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So because they are number one they are the best and just misunderstood? That is a weak argument. I wouldn't say I hate Apple the company, but I don't like their products. And I am very tired of getting there products shoved in my face. I will buy the device I want and I don't care what their obnoxious company is doing. And who is this person to tell me who to like and dislike?
Sep 16, 2013 2:08PM
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Colored cases just to be hid in a phone condom as they break so easily.

 

Please apple your copying of Nokia is just sad. Nokia phones look better, have all the new tech(NFC, 41 MP camera, wireless charging, large screens, WP hubs, near unbreakable) and are lower cost.

 

On the 5S, have fun giving your fingerprint to the NSA.

 

 

Sep 16, 2013 2:10PM
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Apple "hater" appears to be extreme statement. I am falling out of like with my Iphone 5 and my Ipad because it cannot multitask, I cannot remove the battery from my phone, I cannot expand the memory and I must pay more for cloud storage although I have shelled out thousands for all the apple products. Customer service can be rough if you live in a remote area and finally; just when I decide on which apple product to buy and new and improved one comes out! Otherwise, I enjoy the simplicity. I am going back to android platform soon to be honest.
Sep 16, 2013 1:56PM
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When apple is made in the USA then I will buy Apple products. They make  their money in USA  so make their products here too.


Sep 16, 2013 2:19PM
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It is all about preference.  I am just glad we have choices!

Sep 16, 2013 2:14PM
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Apple didn't become the world's largest company by selling cheap initiations of its products to gain market share. It's just that simple. And all the foot stamping and gnashing of teeth in the world is not going to make Apple sell its soul and destroy its brand. "Analysts," indeed.

Sep 16, 2013 2:14PM
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This is why there is chocolate, strawberry, and vanilla. Individuals want their preference. I know many folks who are Apple only techies. I know many who simply will buy anything BUT Apple for many of the reasons already listed. One of the great things in this country is that we have a choice! Most people are making their choices so let the market be driven by customer choices. I personally like Microsoft products because their software (phones, tablets, PC's and X-box) is becoming universal over all platforms. Just my preference. I know folks who like Microsoft PC's but want Apple phones/tablets. Others like Microsoft PC's, Apple Phones, and Google tablets. The free market will drive the product manufacturing. Blackberry is vanishing in front of our eyes. The Windows phone is selling very well in Europe, but not so well in the US (I own one and love its ease of use). In the end, Apple, Google, and Microsoft will carve their own niches while Samsung, Nokia, etc...will manufacture based on sales.
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