Apple, Jobs and AAPL
Apple makes the best computers, period.
It’s hardware is elegant, powerful and innovative.
It’s software is state-of-the-art, robust, secure, intuitive and excels in ease of use.
It’s balance sheet is near impeccable, with an enviable large cash position.
It’s got great talented designers, engineers and programmers.
It’s got vision.
So what’s wrong?
In a world of “just good enough” mass produced commodity PCs, Apple is marginalized because the cost of producing the best is high. It’s a conundrum in that the very cost seems to preclude higher market share and thus reinforce its niche status. The result is that the Mac community appears perpetually divided between those who accept Apple for the total value at a higher cost and those that believe that management has not capitalized on it’s strengths and innovation to gain broader market acceptance.
When you’re out numbered 49 to 1, survival is dependent on strong leadership, loyal troops (customers) and the need to innovate or die. Apple’s ability to stay in the game - prosper, even - is truly amazing and rightfully lauded.
Will things ever change?
Maybe not. It seems to some that with Jobs at the helm, there is no room for other strong managers to help grow the franchise;
Why isn’t there a Chief Operating Officer, senior managers of Consumer, Education, Corporate and Government sales?
Maybe so. My personal belief is that Apple has not used it’s $4.5 billion cash hoard effectively. First, all that money is returning less than 1% interest annually - a very poor return on capital by most measures. [By investing in,say, a highly liquid, fixed income, short term (1-2 year) ETF, Apple could double it’s return with very little additional risk. This alone would generate an added $40 million a year]. The use of this “found” money could then be used to fund the core of first class sales teams covering the aforementioned sectors. Personally I would spend much more, perhaps some as discounts to targeted large scale purchasers. The obvious goal is increased market share and concomitant lower unit costs - heading to the virtuous cycle of lower costs to lower prices to higher sales.
Dump Steve?
No. He’s a fine Chief Visionary Officer but one who could benefit from a more independent Board and to be willing to delegate more authority and assign responsibility.
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