I recently penned my own six “Soft Spots on the Apple.” Today, the WSJ tried their hand at this whole writing about Apple thing too with their “Seven Reasons Apple Shareholders Should Be Cautious”. Whereas my criticisms of Apple (which were decidedly from a branding POV) were smart and cheeky, the WSJ’s criticisms were cruel and tragic. The WSJ article proves my point that “Being #1 puts a big red X on your back.” The press is already clamoring to dethrone Apple. The WSJ raises seven points which are in bold and my responses are in italics.
1) Apple’s good—but not that good. It’s just that the competition is so bad. Really? You’re making this argument? I am pretty sure third graders have thought twice before making this argument. You know what? Fuck it. Brett Arends you are correct. What Apple does is easy and Apple isn’t that good and Usain Bolt isn’t fast either. It’s just that every other goddamn human who has ever lived is slow as a fucking three-legged dog. But what would I know. I’ve just actually worked at hardware and software companies that make devices before.
2) Apple fatigue. You-Brett Arends-you’re a sneaky one! By writing this article you are making this one come true! You sly dog, you!
3) The share price. Really hard to see how you can count this one against Apple. Are you saying high share prices are unequivocally bad or that Apple is overvalued? Maybe we can get together this weekend and compare DCFs. We’re probably using different perpetuity growth rates. Or maybe my discount rate is slightly different than yours because I am using a different set of comps. Or, then again, maybe it’s just because your entire argument on valuation boils down to “No one knows the future.” Indeed.
4) Steve Jobs’s ego. I don’t care how much of a genius he is: Nobody is perfect. Wow. Remind me not to make friends with Brett anytime too soon. Apparently he sets a very high bar. He’s taking the man whose initials are substituted into the acronym WWJD and calling him out on his imperfection…wow. Your wife is a saint, sir.
5) The cellular networks. At what point will they stop giving away the store? This is an interesting point. It is possible that AT&T could demand a larger slice of the pie from Apple. Although game theory would suggest the exact opposite outcome, since Apple is likely to introduce additional players into the market (Verizon, T-Mobile, etc. at some point in the medium-term) and each player will have decreased leverage over Apple, at least this point seems to have some underlying logic. For the time being, I’ll assume you cribbed this point from someone else.
6) Apple backlash. Umm…so this is just #2 again, isn’t it, huh? Perhaps it was a typo or maybe it’s subtly emphasizing your point…and emphasizing my point too.
7) Steve Jobs’s health. Here we agree! This is a big deal and Apple needs to be much more clear about succession planning.
Ed: I hope Brett has a sense of humor. I actually love the WSJ and think he’s a fine writer. We may need to sit down together and work on his valuation skills a bit though.
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