Is there a future for Apple after Steve Jobs?

While the company remains strong ahead of its next scheduled product launch, its time as a tech pioneer may be winding down.

By MSN Money Partner Aug 16, 2013 4:19PM

By Michael Brush, MSN Money columnist


It's time to sell Apple (AAPL) soon -- if you were smart enough to buy it in the pullback to the $400 range earlier this year. Or else it's time to short it soon, if you bet against stocks.


The reason: While Apple may stay strong here, moving into a possible September 10th iPhone upgrade launch, Apple's basic problem remains. It was largely a personality-driven company under the sheer genius and will of Steve Jobs -- and that driving force was so unique it can never be replaced. So Apple will never be the same.

That was my thesis when I told readers of my investment newsletter, Brush Up on Stocks, to avoid the stock back on September 11, 2012, when Apple traded at around $665. That was right before it started its long descent to $385 (from which it has rebounded to $501). And it is still my thesis. I think this "Jobs problem" at Apple is clear to anyone who takes the time to read the Walter Isaacson biography, "Steve Jobs," a great book.


The Apple Inc. logo is displayed on the back of the new MacBook Pro David Paul Morris/Bloomberg via Getty ImagesInterestingly, my thesis was decisively confirmed by long-time Steve Jobs friend and adviser, and Oracle (ORCL) CEO Larry Ellison --  in an interview recently aired on the Charlie Rose show. During that interview, Ellison confirms the high level takeaway here: Apple did well years ago when Jobs was there. It did poorly when he left. It did well when he returned. And now, with Jobs gone, it will struggle.


Ellison, who spent considerable time on storied long walks with Jobs -- a preferred Jobs "meeting" format -- praises the iPhone inventor as a unique design and marketing genius who paid excruciating attention to minute detail of products -- as well as the color schemes, product layouts and payment systems in Apple stores. And that's a big part of what makes him irreplaceable, says Ellison.


Ultimately, this means Apple is just another contender in consumer products. And that's a tough place to stay consistently relevant unless you have a Jobs at the helm, because the competition is so tough and product cycles are so short. Ellison likens consumer electronics product companies to rock bands in that they constantly have to produce new hits to stay relevant, a colorful analogy.


Interestingly, Ellison cites Apple competitor Samsung (SSNLF) as one of the best tech companies around. He all but suggests Samsung should replace Apple as one of the "four horsemen" of Internet based, consumer-facing technology companies. The other three horsemen in this metaphor are Google (GOOG), Amazon (AMZN) and Facebook (FB).


The bottom line: Apple stock may well stay strong as the buzz builds towards the reported September 10 product launch date. So taking profits, or betting against the stock, may make more sense in the first week of September, closer to that date. But after that, the stock could weaken or stay sluggish before going into a long-term descent.


One wrinkle here: there may be another upgraded iPhone product launch in the second half of this year, which could also buoy the stock. But my guess is that after that, the Apple buzz will fade once it becomes clear these upgrades are just variations on a revolutionary product, and not revolutionary products on their own -- and that few, if any, additional revolutionary products are on the way, with the Jobs genius gone.


At the time of publication, Michael Brush owned shares of Facebook, and he suggested Amazon at $192 and Google at $600 in 2012 to readers of Brush Up on Stocks, an investment newsletter.


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12Comments
Aug 17, 2013 10:24AM
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Ridiculous. 500 a share. Who was it that said 1k a share? Tech comes and goes. It's all shared technology. Apple is totally blown out of proportion by wall-streeters looking for a profit and the ignorant youth who buy into anything that's told. Consumer tech is only as valuable as the celebrity you get to endorse it. Look at Nikon. How much licensed technology from other companies goes into Apple products? Samsung should be putting a dent into the cellular phone market but where is the reflection. Let me guess. Google, Microsoft, Motorola, Nokia, intel, etc. etc. are all going to close up shop and Apple will rule the world. And we wonder how Wall-Streeters get so wealthy.
Aug 19, 2013 7:38AM
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Apple is up 3500% over the last ten years. Oracle is up 150% during that same period. So far, apple looks better to me. Maybe mr brush should review his methodology. 
Aug 16, 2013 9:08PM
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Who is Steve Jobs?? did he have a  job at Apple.....Or Mac.....I thought it was Mac ??

 

AT&T made a phone and a computer, so did IBM and others...NBD...

Who are these jonnie-come-latelys...?

Aug 16, 2013 6:50PM
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The guy made a phone and a computer. Genius?
Aug 17, 2013 7:40AM
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He who controls the operating system, controls the industry.  .Interesting that it's now a Google vs Apple world.  Who would have thought that Microsoft would die with one flip of the I-phone.  If I was to short anybody it would be the "Microsoft Partner" who wrote this article.
Aug 18, 2013 1:06PM
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When the new Iphone comes out in September,watch for Apple`s stock to hit $700

by Christmas.Buy it or cry and weep.

Aug 18, 2013 9:53AM
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It's hard to imagine Apple continuing to grow at a strong rate with or without Jobs.  It's tremendously difficult to keep pushing the envelope in a major way once your earnings are so large it takes a lot of profit just to nudge the growth rate a little.  And, as we're told in the preface to Greenwald et al's Value Investing: "competitors would be drawn to profitable industries and ultimately force profits down to a normal range."

That's what we're now seeing with Samsung, Google Android, etc.

Aug 17, 2013 9:45PM
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Who cares about monkey smart phones and tablets that have replaced boom boxes and dumb phones?

Aug 18, 2013 7:33PM
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Apple once almost went out of Business with Jobs, therefore stop making assumptions that any pullback is strictly about Job's absence. It's even doubtful that Jobs created much of anything. He was a person who could spot the Genius of others and buy it out on the Cheap. He was a person that expected perfection of others while his company paid slave wages overseas. Currently, Apple is printing Money like Candy due to their huge success via Margins and Products. The reports of their demise is vastly overstated. However, sooner or later, folks will realize a phone is just that, a freaking phone.
Aug 16, 2013 6:19PM
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you are very ignorant and have no new facts. You owe us an apology for such a misinformed article..
Aug 16, 2013 6:35PM
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Petty Apple. Good bye. Nobody will miss you.
Aug 18, 2013 9:09PM
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Looky folks.  This is being jacked up so the street can short it to oblivion.  Facebook was jacked to its offering price and watch it slide. Apple is the sunday special now on the street.  Anybody think otherwise goood luck. 
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