Has Apple (AAPL) Turned to The Dark Side?
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Price: $166.90 --0%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.3%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.3%
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Not long ago Apple (Nasdaq: AAPL) was viewed by the public as a cute, hip, underdog technology company that happened to have interesting and alternative products to the evil behemoth of the day, Microsoft (Nasdaq: MSFT). Buddhist, CEO, and Apple founder, Steve Jobs, relished his rebel image and in many ways thought of himself as an outsider. Fast forward to the present, with straight edge Steve Cook at the helm, Apple is now the most valuable company in the world and its long cultivated "rebel" image is very quickly evaporating, and in its place, in the view of many, is Darth Vader.
The company's turn to the dark side is illustrated by the recent headlines surrounding the release of the much-hyped iPhone 5. While few doubt the success of the product, it is clear that, justified or not, Apple’s public image has taken a hit. Notably, headlines about a worker riot at a China factor run by Apple partner, Foxxconn, helped blacken Apple’s name. Defenders say Foxxconn isn't Apple, and while that may be true, it does work for Cook & co., and Apple is well known for putting the screw to suppliers in an effort to drive down costs.
Apple also received negative feedback for two decisions which it had direct control over. The first is the dumping of Google maps, which was bemoaned by users frustrated by the functionality of Apple Maps. If successful, the new maps will ultimately help Apple divorce itself from Google, so from a business perceptive it makes sense in the long run. For customers who might mistakenly take a wrong turn into a dark alley, it isn't nearly as fun.
Second, investors have known for months that Apple will be replacing its 30-pin port with a smaller 9-pin port on its new Phone. What wasn't known, however, was the price of the adapter. At $30, the price is much higher than expected. Early reports say that, due to a rumored authentications chip, Apple users will have a difficult time using less expensive, third party adapters and will have to buy Apple’s, at least for now.
Taken together, it is clear that Apple has completed its transition. They are now the Empire. For investors this isn't necessarily a bad thing, since it is clear Apple will not hesitate to pull every revenue-generating lever it has. For consumers, so far they are accepting of Apple's new, bad-boy image. It remains to be seen if they will stick around long term, but they just might. Apple may not be as lovable as the Steve Jobs Apple of old, but it is still cool, and that might be what matters most.
The company's turn to the dark side is illustrated by the recent headlines surrounding the release of the much-hyped iPhone 5. While few doubt the success of the product, it is clear that, justified or not, Apple’s public image has taken a hit. Notably, headlines about a worker riot at a China factor run by Apple partner, Foxxconn, helped blacken Apple’s name. Defenders say Foxxconn isn't Apple, and while that may be true, it does work for Cook & co., and Apple is well known for putting the screw to suppliers in an effort to drive down costs.
Apple also received negative feedback for two decisions which it had direct control over. The first is the dumping of Google maps, which was bemoaned by users frustrated by the functionality of Apple Maps. If successful, the new maps will ultimately help Apple divorce itself from Google, so from a business perceptive it makes sense in the long run. For customers who might mistakenly take a wrong turn into a dark alley, it isn't nearly as fun.
Second, investors have known for months that Apple will be replacing its 30-pin port with a smaller 9-pin port on its new Phone. What wasn't known, however, was the price of the adapter. At $30, the price is much higher than expected. Early reports say that, due to a rumored authentications chip, Apple users will have a difficult time using less expensive, third party adapters and will have to buy Apple’s, at least for now.
Taken together, it is clear that Apple has completed its transition. They are now the Empire. For investors this isn't necessarily a bad thing, since it is clear Apple will not hesitate to pull every revenue-generating lever it has. For consumers, so far they are accepting of Apple's new, bad-boy image. It remains to be seen if they will stick around long term, but they just might. Apple may not be as lovable as the Steve Jobs Apple of old, but it is still cool, and that might be what matters most.
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