Apple: Is Tim Cook telling investors the truth?

Until the CEO does something original, Wall Street won't believe anything he has to say about future innovation.

By TheStreet Staff Jan 24, 2013 1:50PM

CEO copyright Photodisc, Getty ImagesBy Rocco Pendola thestreet logo

 

For a minute on Apple's (AAPL) fourth-quarter earnings call, Tim Cook, ever so slightly, sounded a like former Research in Motion (RIMM) CEO Jim Balsillie circa 2011.

 

Apple's entire call was fantastic. It's absurd the stock tanked on such a solid quarter and best-in-breed guidance, but you were warned on TheStreet. What happened should not come as a shock.

 

However, tucked into the specifics was a Balsillie-like vagueness from Cook we never would have received from Steve Jobs.

 

I remember listening to RIM calls when Balsillie imprecisely quantified Blackberry Playbook demand. With fifth grade comprehension skills you could have sniffed out the trouble at the company It was apparent. Nobody cared about the Playbook, Balsillie knew it and he was floating overly optimistic and wholly random numbers.

 

While Apple, as usual, delivered plenty of specifics, Cook's contention that the product pipeline is "chock full" of "incredible stuff" concerns me. I wasn't expecting a product announcement, but I wanted something that inspires confidence. It was great to hear that Apple will not slap its logo on some random product just to generate revenue, but why bring up the "product pipeline" at all if this is all you have to say about it?

 

By doing this, Cook flashes a sign of weakness. He's clearly attempting to allay fears. That's not good. If it's not a problem, why even acknowledge it? Simply let the obvious assumption that Apple has innovation up its sleeve stand better left unsaid. The way Cook pulled off that line made me less confident that he actually has anything of meaning -- something other than refreshes, cosmetic changes and evolutionary tweaks to current products -- locked and loaded.

 

But this comes as no surprise. Harken back to an article I wrote on TheStreet in May 2012 -- Sell Apple, Buy Amazon -- where I questioned a Tim Cook-navigated Apple:

 

When Jobs was alive, investors were afraid he was going to die. Now that he's gone, he's no longer here. And that's even worse. What else could explain the rapid surges and equally as swift pullbacks Apple has experienced over the last year or so? Sure, you can blame market manipulation conspiracies, hedge funds, mutual funds profit taking, the broader market, the economy, the rumor mill or sheer stupidity, but these excuses do not cut it. It's all about investor confidence.

 

Investor confidence in Apple's future. It was there with Jobs. It's there at Amazon.com (AMZN) with Jeff Bezos, but it's clearly not there with Tim Cook as Apple CEO. Cook just does not display that Apple swagger.

 

That's the core problem at Apple. Do I think it should dog the stock as much as it does now? Absolutely not, but what I think -- no matter how rational it is or how much AAPL bulls want it to be true -- cannot break this bearish trend. Only Tim Cook can, but he has to produce fresh results.

 

I still think AAPL can rebound. Its best days -- as a company and stock -- do not have to be behind it. However, something or somebody must turn the tide.

 

For better or worse, a wildly successful iPad mini didn't do it. Same goes for record iPhone sales, a growing cash pile and major inroads in China. It's all about innovation that has Tim Cook's, not Steve Jobs's name on it.

 

Until we see something that qualifies, investors will refuse to believe the things Apple tells them if they're not verifiable in the company's financial statements.

 

 

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15Comments
Jan 24, 2013 8:23PM
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Always pays to keep track of your "insider trades" or get alerts on them.
Jan 24, 2013 5:41PM
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What I am suspicious is that several Apple board members sold large chunks of their stock during 2012. Why did several of them sell so much of their stock?  Why does one board member possess $0 in stock, and two hold less than $1 million in stock?  What did they know? 
Jan 24, 2013 5:30PM
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Isn't it hilarious that a lot of rich folks are losing there ****?...LOL!
Jan 24, 2013 5:09PM
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How many innovative products can you have when we really don't need all these innovations?  If they would just have software innovations instead of new hardware every month or so perhaps people might want to buy their products.  Why buy a phone or pad from these guys when you know that they are always going to come out with another model in 2 or 3 months? Apple is well know for going thru shopping malls and getting the police to arrest cart vendors for selling an apple lookalike case for a phone. They are one of the worst companies I have ever seen. Why their stock price is so high is beyond me. Plus, why does the whole market suffer on account of a computer hardware dealer.  Plus they don't even manufacture their product in the U.S.A.!!!!!!!!!!!!!!!!!!!
Jan 24, 2013 4:58PM
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I seriously wonder if Cook's 'preference' has anything to do with his lack of swagger. Apple is not an interiior decorating company.
Jan 24, 2013 4:31PM
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141 billion in cash, the richest company in the world.  just you wait, something big is coming, whether from within or from an acquisition. 
Jan 24, 2013 4:06PM
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This is too funny ...this putz is bragging he said sell Apple when it was at $535 a share ........hello numbnutz it went to $702 within 4 months of your "call" ......you in fact called a bottom !!!!

I guess anyyone who gets a job on cramers "staff"  (hmm) has got understand how to pretend you were right even when you are sooooooo freakin wrong.

enjoy your time on cramers "staff" ........
Jan 24, 2013 3:49PM
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Apple built their fortune on innovation and quality. Problem, there are no revolutionary game changing product(s) rolling out from Apple, just upgrades of the same old thing. Expectations are extremely high and the mystery will unfold as to whether they can deliver on another revolutionary product(s) in the near term.
Jan 24, 2013 3:37PM
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apple sucks just a name and look at where they make there goods...
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