Jobs, Cook, and Credibly Good

Apple is making a truck load of money. Actually 22.7 truck loads (see math calculation at bottom). $13.6 Billion in net profits for their 2nd Quarter 2016.

So what’s the problem? After their Tuesday evening announcement, Apple’s stock is down nearly 10%. The simple answer is that Apple had its first year over year quarterly drop in 13 years. Random but omniously, an Apple employee was found dead at 1 Infinite Loop the day after the Q2 announcement.

Questions for Apple include:

• Is this growth stall a sign of a gradual decline in their revenues and net profits from their 2015 highs?
• Will the crown jewel iPhone finally come under pricing pressure as global mobile phone growth stalls?
• Can Apple regain the magic of their iPhone line with the fall 7 announcement?
• Does Apple have any major products announcements coming? AppleCar?

Jobs “Insanely Great” Product Lines

In Job’s 2nd tour of duty at Apple beginning September 16, 1997, exactly 12 years from the day he quit first 1st tour of duty September 12, 1985, he delivered the following smash hits:

• iMac 1998
• iPod 2001

• iPhone 2008
• Macbook Air 2008
• iPad 2010

Jobs died October 5, 2011.

If we count these 5 product lines as his “insanely great” products, that would be 1 “insanely great” product lines every 2.8 years.

Cook’s Credibly Good Product

Here we are closing in on 5 years from Jobs passing, and the one major new product line release Apple has delivered post Jobs is the AppleWatch in 2015.

The AppleWatch has sold well, but it lacks the “WOW” factor of Jobs’ creations.

Can One Man Matter That Much?

Tim Cook has proven to be a strong CEO, and is well respected as a brilliant operator. What is uncertain is if Cook’s Apple can build and innovate “insanely great” products. Apple has an army of brilliant designers, engineers and marketers. Many who worked on insanely great product launches in the past. They also have the world’s most valuable brand, incredible retail stores, and a war chest of cash to fund huge product challenges.

Is AAPL Following the MSFT Pattern?

Brilliant and iconic founder leaves the organization at their height of their dominance. Trusted and respected lieutenant takes over the leadership. The cash cow continues to produce, despite a slowdown in innovation. MSFT is still a cash printing giant and will likely be around for decades in some shape or form. It just isn’t the 800-pound gorilla destroying competitors on its journey to building its empire.

Apple is Fine, But is It Insanely Great?

Don’t cry for Apple. They are doing just fine. They are in no danger of going away. Wall Street is fickle. One day you are up, next day you are down. Gyrations in stock prices with every quarter is the nature of the beast. Apple’s stock will likely stablize and recover. The iPad, iPhone and Mac lines have plenty of life left to delivery huge revenues and profits for the foreseeable future. That being said, like a great baseball player suffering from a slump, Apple could sorely use a home run to get its mojo back. Apple employees under Jobs were accustomed to cranking out great produts like Taylor Swift turns out hit singles. If Apple does come up with an insanely great product, hopefully that muscle memory will return and they can accelerate their speed to market like in the Jobs’ days. If not, there may be a few less trucks required to haul away the treasures from their quarterly results.

How Many Truck Loads of Profits for Apple in their Q2 2016 Period?

• 12,200 pounds hauling for a Ford F150.
• 20.4 pounds for $1 million in $100 bills.
• $598 Million $100 bills per Ford F150 (if weigh and not volume is the limiting factor).
• $13.6 Billion in net profit for Q2 2016.

= 22.7 Ford F150 trucks.