The Macalope Weekly: The games we play
Let’s face it, the world of technology coverage is often a charade. Those brash and yelly Wall Street people on TV are often just playing a role for dramatic effect. Reports of Apple’s quarterly results must be portrayed in the silliest light possible, or how will you get people to pay attention to you? And, as we’ve all learned, two things sell: sex and Apple. So make every story about Apple, whether it is or not.
I play one on TV
Yahoo Finance’s Jeff Macke is putting on his stern face and playing Apple curmudgeon because that’s what you do when you make Wall Street talking head videos.
For “balance,” Macke has on S&P Capital IQ’s Scott Kessler, who is tepidly pro-Apple because that’s the entire spectrum that we should hear from: over-the-top anti-Apple to tepidly pro-Apple. The world is not ready to hear from an Apple bull.
“Why would I possibly want to own this tech company with Tim Cook at the helm when he’s just that boring and there is no growth?”
Good question! It’s true that Apple’s growth has slowed in the last couple of years. The question is: Do you feel that Apple is capable of shipping another market-remaking product? Maybe you feel your technology investment dollar is better put into one of the many other companies that churn out market-remaking products on a quarterly basis.
You know, like Stark Industries, Cyberdyne Systems, Weyland-Yutani, or Yoyodyne Propulsion Systems.
Whoops, those aren’t real.
It’s always a little rich having Wall Street lecture Apple on innovation, as all of Wall Street’s innovations are variations on the shell game. Those who can, do. Those who can’t make hedge funds.
“I don’t know if there are rabbits in the hat but if there are this guy can’t find them and if he could there’d be supply constraints anyway.”
Apple’s so lame. If it makes stuff, demand’s just going to be too high for it anyway! Why do they even bother?
When Kessler suggests Apple could still be a good buy because it’s undervalued as it is, Macke says:
“Until they come with an iOuija board to get another idea from Steve Jobs there just ain’t growth here, folks.”
Yes, only the ghost of Steve Jobs can help Apple now. That’s just a fact, people. Innovation is dead at Apple, because, look, we don’t see them innovating and they always used to innovate right out there in public on De Anza Blvd.
The red flag in Cook’s statement is that he considers flagging iPod sales a surprising headwind.
Actually, wrong! That’s not what he said. He did say it was a headwind but added:
I think all of us have known for some time that iPod is a declining business …
But it doesn’t matter what Cook actually said. What matters is what you hear, right? Or, in this case, what you pretend to hear.
Google, Samsung, and Amazon all announced results this quarter that could easily be seen as troubling. But we all know who the pressure’s on, right Michael Liedtke of the Associated Press?
“Pressure Mounts For Apple To Expand Its Horizons” (tip o’ the antlers to Shawn King)
It’s fine for Samsung to keep doing what it’s doing because, well, it’ll just attach itself like a lamprey to whatever Apple comes up with next. Google, of course, shows us all its prototypes, half of which may never come to market or will get quietly killed after the company realizes that if no one is in the self-driving car, who is there to show ads to? Amazon, meanwhile, could lose a billion dollars and light one of its warehouses on fire and its stock would still go up.
But, Apple …
The void in Apple’s lineup is a major reason why the company’s quarterly revenue may be about to fall for the first time in more than a decade …
Or it may rise. Apple’s basically just forecast it to be flat next quarter. But let’s just assume it’ll fall, even though Apple usually beats its guidance.
… much to the dismay of investors who are worried that Apple Inc. is losing its verve and vision.
Plus its valve, its viscosity, and its viands.
Those competitors offer a broader selection of designs and prices than the iPhone and the iPad.
Yeah, it’s like Apple only makes a select number of products, like it focuses or something. Weird. If only the company would explain that in, say, a commercial.
That trend is one of the reasons that Apple’s revenue growth hasn’t exceeded 6 percent in any of the past three quarters.
So, Samsung, king of the gigantophones, must be doing awesome, right?
Samsung’s earnings were hurt by a drop in margins in its mobile phone division, which saw operating income fall 18% quarter-on-quarter.
Well, that’s strange. It’s like none of this makes any sense.
“There is a gap where Apple is not playing, and it’s clear that many users want some of these other things in a phone,” [International Data Research analyst Ramon] Llamas said.
Uh-huh. Say, Ramon, how many giganto-phones get sold in a year? Well, according to Juniper Research, it was something like 20 million in 2013. Apple shipped two and a half times that many iPhones … (and here the Macalope is required by law to use ellipses to indicate a pause for dramatic effect) … in a quarter.
But not having a phablet is killing Apple. KILLING IT.
Cook said Apple still attracts a “significant” number of first-time iPhone buyers.
Actually, he said that about the iPhone 5c in particular, which Liedtke implies is a loser because Apple apparently sold more units of the 5s.
If an iPhone with a bigger screen is in the works, it would pose another test for the company as it tries to ensure the device retains the same high resolution and other features in earlier generations.
Apple must sell a larger phone. But a larger phone presents untold challenges for Apple.
Could you construct a more elaborate catch 22 for Apple, Michael? This one seems a little facile.
Google’s mistakes are bad for Apple
In other news this week, Google is selling Motorola—which it bought just two years ago for $12.5 billion—to Lenovo for $2.91 billion. Now, Google had already sold off some other parts and will retain the patents (not that they’re doing the company any good), but it’s pretty clear this was a failure, to the tune of a few billion dollars.
Hmm, let’s see, how to spin this? Hmm. What’s the right way to talk about Google blowing billions of dollars on a failed acquisition?
Maybe our friends at CNet can help us out.
“Lenovo-Motorola deal puts more pressure on Apple—analyst” (tip o’ the antlers to Michael Ferenczy)
Awww, yeah. Just look at that. Sometimes you have to take a step back to get the big picture. And then you keep stepping back until you can no longer see what you’re looking at and instead write something about how bad things are for Apple.
In an investors note published Thursday, [JP Morgan analyst Mark] Moskowitz said that the move will futher consolidate the fragmented Android smartphone arena.
Oooh, the Macalope gets it now. Having Motorola owned by Google was fragmenting the Android nooo, the Macalope doesn’t get that at all.
It’s amazing that the English language doesn’t just shatter like a piece of porcelain when you force it into such logic-defying constructions. That’s probably why it’s so irregular.
And in so doing, it will also limit Apple’s ability to woo Android users unhappy with the current crop of cheap but lower-quality devices.
Nope, not helping. All the horny one hears is “I have got to shoehorn a negative reflection on Apple into this somehow.”
The smartphone market itself may follow the path of the PC market, according to Moskowitz, meaning slower growth, more vendor consolidation, and less of a distinction between different products.
How much more consolidated could it get than Google owning an Android device vendor?
If so, that could spell trouble for Apple, which commands a premium price tag for its seemingly unique devices.
Yes, they seem unique if you evaluate them by objective criteria. But who does that?!
And with more budget-friendly phones coming from Samsung and Lenovo, Apple may need to rethink its resistance against a low-cost iPhone.
Apple owns the high end of the market, but it really should get into that low-margin crappy end of the market because, uh, mumble mumble.
Now, you might find it amazing that CNet would write an article so full of wrong. But would it amaze you even more to know that it wrote the same piece twice? Probably not, because you’re so jaded after reading the Macalope’s columns for so long.
Holy alfalfa, that’s even better! And by “better” the Macalope means “worse.”
Google, sans Motorola, can go back to focusing on what it does best …
Wacky, overly expensive acquisitions?
… making a really great operating system and apps.
Wow, that is not even in the top ten list of things Google does best.
It can mend its relationship with Android leader Samsung and the other vendors.
If anything, Google sold Motorola in the hopes of creating a strong competitor to Samsung.
And it can concentrate on unifying and streamlining the Android experience, rather than worry about bolstering its own hardware operations.
Wait, wait, wait. Then why did Google buy Nest? Two weeks ago, the big story was about how Google’s new killer hardware design team from Nest would destroy Apple; this week it’s how Google’s brilliantly getting out of the hardware business. Google could turn around and buy Motorola back next week for another $12.5 billion, and these people would write another story about how bad it is for Apple.
But Google isn’t all Apple should be worried about.
Oh, of course not. The list of things Apple—and only Apple—should worry about includes killer bees; promiscuous grandmas; Larry Derkins of 505 Spruce Avenue in Lansing, Michigan; and space alien invasion.
Up to this point, only Samsung has posed a real threat to Apple in smartphones. A combined Lenovo and Motorola, however, has the potential to take a large chunk of the market.
Which somehow is a problem for Apple, and not for Samsung. Because these low-cost phones that Lenovo will be churning out will compete agains Apple’s higher cost phones.
Does anyone read these things before CNet publishes them?
Apple, predictably, has offered no public reaction to the Lenovo-Motorola news.
Clearly the company has something to hide. Possibly all the snickering.
Phew. Well, the Macalope’s going to give Ben Thompson the last word on this:
People, please, even if Google made money on Motorola it was still a mistake.
But look over there! Apple!