More Foolish “Apple is Losing its Way” Chatter

March 12th, 2013

As many of you recall, Apple sustained some executive blood-letting in October, with the forced departure of Scott Forstall, the iOS chief, who had been with Apple since Steve Jobs rejoined the company, and John Browett, who ran the Apple Store, but evidently not too well.

With Forstall, his abrasive personality evidently didn’t sit too well with other Apple executives. In the old days, Steve Jobs was evidently able to serve as an intermediary to deal with the personality issues, but the straw that broke the camel’s back, as it were, was Forstall’s alleged refusal to sign the MapGate apology letter, which only bore Cook’s signature. There may be other reasons that haven’t been discussed in the media, but it’s also clear that failure wasn’t going to be tolerated, and Maps for iOS 6 was perceived, if in an exaggerated way, as an utter failure.

Well, just this week, one financial commentator has decided that these two departures are only the tip of the iceberg, that Apple is poised to suffer from the loss of a number of key people. Why? Well, remember that Forstall and Browett left five months ago without hurting Apple in any visible way. Indeed, Maps has apparently gotten a lot better, and even won out in a three-way comparison, including Google Maps, which was staged by several tech commentators in recent ways.

So why would executives and engineers suddenly decide to leave five months after the event that allegedly triggered their departure? One reason is supposedly the rapid decline in Apple’s stock price, but that would only impact investors and executives who had stock options. And nothing forces them to cash in now. They can always wait with the expectation that things will get better over time. With Apple, they usually do.

Also, you’d think that, if people were so upset with the way Forstall was treated, they’d have packed their bags last fall. Why sit back and wait? Indeed, the reverse may be true. Employees who couldn’t stand Forstall might have been more willing to stay on as a result of his departure. Indeed, hardware executive Bob Mansfield, who had actually signaled his retirement from Apple, took on a new assignment. Reports, not actually confirmed, had it that Forstall and Mansfield were unable to even be in the same room together.

I guess the commentator in question didn’t notice that.

This doesn’t mean Apple is getting away scott free. The stock price is still on the decline, and there are unconfirmed supply chain rumblings of a serious falloff in February sales. Once again, Tim Cook reminded the financial community during January’s conference call with analysts that you cannot take one supply chain metric and understand the entire supply chain. The only indication of sales that seems to have credence is the report from the NPD Group that Mac sales soared 31% in January, perhaps as the result of shipping more iMacs to customers. The updated all-in-one desktop had been severely back ordered since the original releases last year. Supply and demand were not really aligned until the past few days, where Apple began to quote delivery times of 24 hours for standard models, and five to seven days for custom configurations.

Working against Apple is the fact that, aside from a minor refresh of the MacBook Pro with Retina display lineup last month, very little has changed. There hasn’t been that expected preview of OS 10.9, which still may happen soon. There are no Apple media events to introduce, well, something or other, perhaps another revision to the iPad.

Now it may well be true that sales of the iPad have fallen, replaced by the iPad mini. Apple doesn’t mind cannibalizing their own gear, and, with a lower price, it may well be that the mini means more sales for Apple. Nothing wrong with that. The decision to expand the larger iPad lineup with a 128GB version merely means that Apple is trying to attract business customers for whom more storage space would be very useful. As you know, Apple doesn’t offer a slot to install a memory card, an option offered on other tablets.

Facts, however, clearly can’t reduce skepticism about Apple’s future prospects. That ship has sailed. Instead, Apple needs to make some significant product announcements that will help calm investors who are being led to believe that creativity died with Steve Jobs, and that the company is hoping to survive on automatic pilot. Sure that belief may be wrong, but reassurances won’t help. It’s all about the new products in the pipeline and sales and profits.

It won’t hurt if Apple comes up with an iWatch, a big upgrade to the Apple TV box, or even a smart TV alternative. But calls for a low-cost iPhone (low-cost without a carrier subsidy) may fall on deaf ears unless Apple finds a way to make a lower cost product that doesn’t seem cheap. But that assumes Apple wants to play in that sandbox.

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One Response to “More Foolish “Apple is Losing its Way” Chatter”

  1. DaveD says:

    What is so quite obvious to me is that Wall Street put Apple shares in play. “Financial commentators” making stupid or exaggerated statements that get noticed and followed by those who play or get played.

    My news feeds tell me that Apple is building more data centers, cleaning up Maps data and making product improvements in hardware and software. Apple is not standing still. It works quietly.

    A few years back Apple made improvements in the battery life for the Mac notebooks. The charge cycles were bumped from 300 to 1000. Portable usage on battery got extended. It would be something if the mobile devices can get more battery life. Charging the iPhone once a week would be a great feature.

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