Apple Offers Damaging Campaign for Little Over $1B
Danny is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Recent trends against and with the Apple (NASDAQ: AAPL) tide are annoying. They've made it easy to lose sight of a company inundated with hatred-inspired doomsday prophecies and blind fandom.
Let's clear the noise.
Below, you can find three ways that Apple has affected itself to slow its growth pattern. Yes, you heard that correctly: an Apple hater agrees that Apple is a sound investment. China is a promising market and I'm among the first to herald the importance of a brand that builds a loyal community.
What isn't so sound is the extreme hatred or love for this company. That propaganda just obscures the following three conditions about Apple, starting with selling out its brand quality for $1B to Samsung.
Samsung Pays Apple $1B In Proving Their Products Are Just As Good
Clear the noise. Opinions around the Apple vs. Samsung case don't matter as much as this simple fact: Apple hired lawyers to prove, by a preponderance of evidence, that Samsung products threatened what were otherwise considered unreachably high-quality products. Through U.S. legislation, the ruling ended up costing Samsung (KRX:005930) over $1B due to infringements as a jury agreed: yes, they're the same.
This attack on their own brand is awkward, especially since in China, Apple products are as much status symbols as Porsche (FRA: PAH3) or Ferrari cars are in the States. Thanks to American legislation, iPhone 5 owners in China should thank others for the compliment "That's a nice Samsung.". For my Chinese readers, I've included the translation below.
Someday, luxury car companies might use legislation to bring themselves down to their competitors' level. Until then, it is not fair to say the following to a Lamborghini or Mercedes owner -- in any language.
All translations courtesy of Google Translate.
The Steve Jobs Legacy is Staggeringly Underestimated
One of my favorite discoveries in tech was weaknesses in Google (NASDAQ: GOOG) as told by a former Amazon (NASDAQ: AMZN) employee's extremely lengthy rant. In it, the employee notes a very important distinction when he says the following.
"There have been precious few people in the world, over the entire history of computing, who have been able to [predict what people want] reliably. Steve Jobs was one of them. We don't have a Steve Jobs here. I'm sorry, but we don't."
It took Steve Jobs decades of experience to nurture an innovative, market-creating company that competitors followed. Again, don't get caught up in recent announcement noise: think instead about how Apple created its markets.
- 2001: iPod launch
- 2007: iPhone launch
- 2010: iPad launch
Google, Amazon, and Microsoft (NASDAQ: MSFT) were playing catch-up. The common factor: Steve Jobs. I could have told you that Apple wouldn't show much in the two years of announcements by Tim Cook; consider whether that even sounds reasonable, given the time needed for previous inventions.
Once you do that, you can poke your head above the noise and see the aforementioned competitors are catching up. Can you reasonably predict this company's story as something other than an iteration machine? While Google's out paving the streets for autonomous cars, Apple is announcing a new adapter at the bottom of their phone.
Perhaps you can judge if the trend would continue by looking at what's going on within Apple, except...
Apple's Internal Operations Are Secret
Apple is notoriously secretive about its operations. Every time some minutiae is revealed about their design process, the reaction is worthy of top-secret information.
This means great surprises, but it also means that investors have no idea what the next great revolution could be or when it'll be launched. It means you can look at the company's old stance on everything from morals to competition and find a completely different strategy today.
With a history based on a different CEO, unknown development patterns, and the current competitive environment in which Apple finds itself, it's up to every investor to decide whether or not the trend is still worthy of their money in the coming years. Fortunately, that decision could lead to profits by looking outside Apple, if smart investors want to capitalize on both the positive and negative extremes...
Capitalizing on the Noise
For those of us unsatisfied with those conditions, take solace: Apple products don't operate in a vacuum. The iPhone requires service from carriers, like Sprint or AT&T, to operate. Mobile carriers are just one part of the potentially profitable pipeline that will see cash from both Apple naysayers and devotees.
If you're interested in truly rising above the noise, The Motley Fool is ready to work for anyone ready to take a deeper look.
dfavela owns shares of Sprint and Google. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.