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“The stock price has been frustrating,” Apple chief executive Tim Cook said at D11, a tech industry conference, last night. “It’s been frustrating for investors and for all of us.”
He might be the calm, steady hand that Apple needs right now. But with Apple stock at about $444, down 36 percent from its high of over $700 in September, he’s not the figure that Wall Street wants.
During the hour and a half he was on stage here yesterday, Cook said a lot of words — but very little of what he said made a serious impact. He projected a calm, avuncular presence, chuckling occasionally at the jokes posed by his interviewers, Walt Mossberg of the Wall Street Journal and Kara Swisher of All Things D. But there was very little emotion or passion in his remarks.
Is he worried about Android’s growing market share? Cook cited iOS usage figures and device sales (85 million iPhones and 42 million iPads to date). Does he have plans for a revolutionary new TV product? He cited AppleTV sales figures (13 million to date). Is he concerned about the grilling he got in the U.S. Senate last week over Apple’s overseas tax-avoidance strategies? He stated Apple’s effective income tax rate (30.5 percent) and the number of dollars it paid in taxes last year (6 billion). He admitted that Apple’s stock price was frustrating and then told a story about what price it was at 10 years ago.
Boy, can this guy throw around numbers. Just about the only time he didn’t respond with a string of digits is when he was asked about Google Glass and other wearable technologies. He said he doesn’t think Glass was ready for widespread adoption, because most people don’t actually like wearing glasses — but that wrist-mounted tech might have more promise. He wears a Nike Fuelband and says wearable tech could be a “profound area.”
So many words. So little content. There is almost nothing in Cook’s 90-minute spiel that you couldn’t have gleaned from the company’s quarterly earnings report a few weeks ago, other than the words “frustrating” and “profound” (which the media promptly jumped on — we’re looking for anything new we can get).
Unfortunately, that’s not what the crowd came to hear from the CEO of the world’s largest (by market capitalization) tech company.
What the crowd — and today’s market — wanted to hear was a dream. They wanted inspiration, something to believe in. They wanted to be sold.
Apple itself may need a kindly, nerdy uncle, and in the aftermath of Steve Jobs, who led by force of personality, vision, and a tyrannical drive for perfection, Cook may be exactly what the doctor ordered.
But the markets don’t want that. They want vision.
And if you’re buying an iPhone today, the vision thing isn’t just an abstract concept. It’s a promise that the entire ecosystem — the hardware, the software, and the services — will not only be around for a long time but will continue to be rich and full of possibility. Nobody wants to buy a phone only to find, with a year still left on your contract, that all your friends are using apps that you can’t get because you bet on the wrong device. Vision is an important part of the product specs.
So what should Cook have done? He’s not going to succeed by trying to be Jobs. He needs to be true to himself, but also deliver what the market wants. To do that, he should:
- Explain how the company is going to stop the market share erosion. Yes, there are a lot of reasons why market share doesn’t matter. As long as its customers are happy and it remains the most wildly profitable maker of phones and tablets, who cares if it doesn’t have 50 percent of the market? But at some point, if Apple’s market share gets small enough, that number will matter. So set a floor and explain how Apple will keep it from going under that level — or reverse the trend.
- Give us a vision. An investor begged Cook, who had spent the past hour avoiding all specific questions about the future direction of the company’s product lines, “Why won’t you give us a glimpse of the future?” Another one asked Cook when Apple was going to give us permission to dream again. The answer wouldn’t have to include specifics about when this or that model of the iPad was going to come out, whether Apple was designing a watch or not — but it should give some sense of where Apple is going to focus its energies. Is it going to respond to Microsoft’s impressive Xbox One announcement with a device of its own that will fix TV? Cook wouldn’t say, other than to note that “there is a very grand vision.”
- Use more exciting words. Jobs was good at loading up his presentations with hyperbole. Everything he talked about was “fantastic” or “incredible” or “really amazing.” That might not be Cook’s personality, but he could certainly learn to use these words a bit more.
- Acknowledge the mistakes early on. Cook did apologize (again) for the fiasco with Apple Maps last year and said he wasn’t yet completely satisfied with where the product was. But he could have acknowledged the mistake earlier — and then added a challenge to Google.
- Trash-talk your rivals a bit more. It took a detailed, probing question about Samsung to get Cook to say anything about the company that, for the past several years, Apple has been wrestling in the courts. He was very measured in his comments about Google Glass and the Android ecosystem. Investors want to see more pugnaciousness. They like a fighter.
- Finally, deliver: This is one area where Cook excels. The company is running like a top, its products keep coming out on schedule and in amazing form, and revenues and profits are both outstanding. Cook is doing an outstanding job of running the company, and he needs to continue doing so.
All he has to do now is sell the dream.
Photo: Dylan Tweney/VentureBeat
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