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Why Apple Won't Be The Same After Steve Jobs


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After a week of hype, Apple revealed the iPhone 4S...not the iPhone 5 as many expected.  Still, other than a slight deflation in the stock price, people are still agog over the iPhone 4S. 

 

In my opinion, Steve Jobs may be the greatest showman since PT Barnum, and that is why over time, Apple will never be the same company after he is gone...not unlike Buffett and Berkshire.  I really admire this guy.  He's truly a great American business story, and there won't be many like him again.  Cheers!

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How is this any indication of how Apple won't be the same after Steve Jobs? This is the same phone that would have been released if Jobs was the CEO. Apple's product cycles are planned out pretty far in advance.

 

I'm not arguing that the company won't be the same w/out him, but don't understand the thread title.

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How is this any indication of how Apple won't be the same after Steve Jobs? This is the same phone that would have been released if Jobs was the CEO. Apple's product cycles are planned out pretty far in advance.

 

I'm not arguing that the company won't be the same w/out him, but don't understand the thread title.

 

Are you sure about that?  He's known for being incredibly anal and meticulous about design, function, promotion and ease of use.  The iPhone's we see today probably won't be as versatile and functional without him, and it is almost certain there won't be the same cult following. 

 

At least with Berkshire, the businesses will continue to operate as they do today, since Buffett was not hands-on with the subsidiaries.  But Jobs had his hand in everything.  Cheers!

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After a week of hype, Apple revealed the iPhone 4S...not the iPhone 5 as many expected.  Still, other than a slight deflation in the stock price, people are still agog over the iPhone 4S. 

 

In my opinion, Steve Jobs may be the greatest showman since PT Barnum, and that is why over time, Apple will never be the same company after he is gone...not unlike Buffett and Berkshire.  I really admire this guy.  He's truly a great American business story, and there won't be many like him again.  Cheers!

 

This is no different from under Steve Jobs. After the iPhone 3G came iPhone 3S. So it is not surprising to see the 4S. Their industrial design cycles are 2 years long. It also means that Steve Jobs mostly led the 4S development cycle, not Cook. Cook came in at the tail end of the cycle.

Apple takes it time to perfect its products, therefore has long lead times. Jobs has probably already left behind plans for another generation of Apple products.

 

Cook may not be the showman that Jobs it but in the end, the showmanship is a small portion of what sells the product. Apple will change after Jobs, but not as much as people think.

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How is this any indication of how Apple won't be the same after Steve Jobs? This is the same phone that would have been released if Jobs was the CEO. Apple's product cycles are planned out pretty far in advance.

 

I'm not arguing that the company won't be the same w/out him, but don't understand the thread title.

 

Are you sure about that?  He's known for being incredibly anal and meticulous about design, function, promotion and ease of use.  The iPhone's we see today probably won't be as versatile and functional without him, and it is almost certain there won't be the same cult following. 

 

Yes. You think the iPhone4S was just designed in the last month or so? Apple sells over 20 million iPhones a quarter. Their design, production and distribution schedules are spread out over somewhat long periods of time.

 

What about the iPhone4S does not show meticulous design, function and ease-of-use? I'm about as big of a Steve Jobs admirer that you'll find, but other than maybe a few aspects of yesterday's presentation, I don't see how this phone would be any different if Jobs was the CEO. And keep in mind that Jobs' role at Apple is likely similar now as it's been much of the last few years when Cook has been the acting CEO.

 

Would people be happier if they just named this phone thet iPhone5, or iPhone Magic, iPhone Amazing or any other name? I would've liked to see it include 4G, but think the current screen size is fine, as is the current body design.

 

If you want to make a comparison to Berkshire, this would be like Buffet buying stock in Pepsi (or any company) and then retiring, and then in 2 months later Pepsi's stock went down for no real reason and saying 'that's why Berkshire won't be the same without Buffett'.

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If you want to make a comparison to Berkshire, this would be like Buffet buying stock in Pepsi (or any company) and then retiring, and then in 2 months later Pepsi's stock went down for no real reason and saying 'that's why Berkshire won't be the same without Buffett'.

 

Not even a close comparison.  Pepsi's product (excluding Frito-Lay) has basically been the same for the last 80+ years, not unlike Coca-cola.  It doesn't take much innovation to hold their marketshare, but a hell of a lot of marketing.  No one at Apple is remotely close, and in actuality, there aren't too many people anywhere that are as good as Jobs. 

 

They will hold their place for a few years after Jobs, but after that, those hungrier will catch up or take market share away.  Think about what happened to Apple the last time Jobs left, and then when he came back.  If you don't think one man was responsible for all of that, then you haven't been paying close enough attention.  Cheers!

 

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If you want to make a comparison to Berkshire, this would be like Buffet buying stock in Pepsi (or any company) and then retiring, and then in 2 months later Pepsi's stock went down for no real reason and saying 'that's why Berkshire won't be the same without Buffett'.

 

Not even a close comparison.  Pepsi's product (excluding Frito-Lay) has basically been the same for the last 80+ years, not unlike Coca-cola.  It doesn't take much innovation to hold their marketshare, but a hell of a lot of marketing.  No one at Apple is remotely close, and in actuality, there aren't too many people anywhere that are as good as Jobs. 

 

They will hold their place for a few years after Jobs, but after that, those hungrier will catch up or take market share away.  Think about what happened to Apple the last time Jobs left, and then when he came back.  If you don't think one man was responsible for all of that, then you haven't been paying close enough attention.  Cheers!

 

You're missing my point. I chose Pepsi at random. My point is your comment would be like Buffet buying stock in a company a month before he retired, and then people blaming Buffett's replacement if that stock is down a couple months later.

 

I'm not arguing that Apple won't be the same without Steve Jobs. You were trying to make the point that the iPhone 4S is an indication of Apple without Steve Jobs, which makes no sense. I can almost guarantee that the iPhone 4S was nearly 100% (if not completely 100%) complete long before Steve Jobs left the role of CEO. It's also important to realize that Steve Jobs is still with Apple. He is the chairman and is still involved in big decisions. He is just no longer the CEO. It's also important to note that for much of the time Apple developed the original iPhone 4, Steve Jobs was on medical leave and Tim Cook was also the CEO. Apple also has a nearly completely different leadership team in place now than it did the last time Jobs left the company in the 90's.

 

Again, I know Apple won't be exactly the same when Steve Jobs is completely out of the picture (and time will tell how much), but with all due respect, it doesn't sound like you have a good understanding of the recent history of this company and a history of their product rollouts.

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I'm not arguing that Apple won't be the same without Steve Jobs. You were trying to make the point that the iPhone 4S is an indication of Apple without Steve Jobs, which makes no sense. I can almost guarantee that the iPhone 4S was nearly 100% (if not completely 100%) complete long before Steve Jobs left the role of CEO. It's also important to realize that Steve Jobs is still with Apple. He is the chairman and is still involved in big decisions. He is just no longer the CEO. It's also important to note that for much of the time Apple developed the original iPhone 4, Steve Jobs was on medical leave and Tim Cook was also the CEO.

 

Hi DCG, no I think you misunderstood my original post.  It wasn't meant to slag Tim Cook or anything, or even the iPhone 4S.  I was simply stating that the hype around the presentation was so huge, as if they were going to present something so revolutionary like the iPod, iPhone or iPad when they came out. 

 

Everybody was expecting at least the iPhone 5, and that it would somehow have technology that would allow us to connect intellectually with our entire network of home appliances, so that all I have to do is think about coffee and my coffee brewer would automatically make me a cup, and add the right amount of cream and sugar.  That it would have a new version of Facetime, where you would be able to create a hollodeck and speak to your friends in 3-D hollographic images!  It was only the next logical development of the existing iPhone 4, but Apple was able to generate so much buzz that everyone thought it would be ground-breaking.

 

That type of hype will never be the same once Jobs is gone...that was my point, not the actual iPhone, Tim Cook or the stock price.  Just that he can sell his own mother for twice what anyone thinks she may be worth, as well as a nice used bridge in Brooklyn!  ;D  Cheers!

 

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I'm not arguing that Apple won't be the same without Steve Jobs. You were trying to make the point that the iPhone 4S is an indication of Apple without Steve Jobs, which makes no sense. I can almost guarantee that the iPhone 4S was nearly 100% (if not completely 100%) complete long before Steve Jobs left the role of CEO. It's also important to realize that Steve Jobs is still with Apple. He is the chairman and is still involved in big decisions. He is just no longer the CEO. It's also important to note that for much of the time Apple developed the original iPhone 4, Steve Jobs was on medical leave and Tim Cook was also the CEO.

 

Hi DCG, no I think you misunderstood my original post.  It wasn't meant to slag Tim Cook or anything, or even the iPhone 4S.  I was simply stating that the hype around the presentation was so huge, as if they were going to present something so revolutionary like the iPod, iPhone or iPad when they came out. 

 

Everybody was expecting at least the iPhone 5, and that it would somehow have technology that would allow us to connect intellectually with our entire network of home appliances, so that all I have to do is think about coffee and my coffee brewer would automatically make me a cup, and add the right amount of cream and sugar.  That it would have a new version of Facetime, where you would be able to create a hollodeck and speak to your friends in 3-D hollographic images!  It was only the next logical development of the existing iPhone 4, but Apple was able to generate so much buzz that everyone thought it would be ground-breaking.

 

That type of hype will never be the same once Jobs is gone...that was my point, not the actual iPhone, Tim Cook or the stock price.  Just that he can sell his own mother for twice what anyone thinks she may be worth, as well as a nice used bridge in Brooklyn!  ;D  Cheers!

 

Thanks for clarifying.

 

The hype was (as usual) driven by the media more than anything. All Apple did was set up a keynote event to announce the new phone. I think a lot of the speculation was due to the fact that it had been 16 months since the last iPhone release (a long time for phone/tech companies, but ordinary for pretty much any other industry). I think Apple was hoping to release the iPhone 4GS earlier this summer, but were most likely delayed by the issues at FoxConn and the Japan tsunami. Producing over 20 million phones and rolling it out globally takes a lot of production time and work.

 

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Hey, I think the hollodeck idea would be awesome.  Can you imagine, you could have dinner parties for your friends without them actually coming over to your house and making a mess!  No food to cook, no booze to buy, no dishes to wash, no dude throwing up in your bathroom because he drank too much!  And you could still enjoy their company as if they were right there.  If anyone can do it, Jobs can!  Cheers!

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I'm not arguing that Apple won't be the same without Steve Jobs. You were trying to make the point that the iPhone 4S is an indication of Apple without Steve Jobs, which makes no sense. I can almost guarantee that the iPhone 4S was nearly 100% (if not completely 100%) complete long before Steve Jobs left the role of CEO. It's also important to realize that Steve Jobs is still with Apple. He is the chairman and is still involved in big decisions. He is just no longer the CEO. It's also important to note that for much of the time Apple developed the original iPhone 4, Steve Jobs was on medical leave and Tim Cook was also the CEO.

 

Hi DCG, no I think you misunderstood my original post.  It wasn't meant to slag Tim Cook or anything, or even the iPhone 4S.  I was simply stating that the hype around the presentation was so huge, as if they were going to present something so revolutionary like the iPod, iPhone or iPad when they came out. 

 

Everybody was expecting at least the iPhone 5, and that it would somehow have technology that would allow us to connect intellectually with our entire network of home appliances, so that all I have to do is think about coffee and my coffee brewer would automatically make me a cup, and add the right amount of cream and sugar.  That it would have a new version of Facetime, where you would be able to create a hollodeck and speak to your friends in 3-D hollographic images!  It was only the next logical development of the existing iPhone 4, but Apple was able to generate so much buzz that everyone thought it would be ground-breaking.

 

That type of hype will never be the same once Jobs is gone...that was my point, not the actual iPhone, Tim Cook or the stock price.  Just that he can sell his own mother for twice what anyone thinks she may be worth, as well as a nice used bridge in Brooklyn!  ;D  Cheers!

 

It was the same under Jobs. Almost every Apple product is met with skepticism. People barely noticed when the iPod was released. They didn't believe that Apple could pull off an iPhone. They moaned that the iPad was just a big iPhone with a crappy name. This time is no different.

 

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Apple is priced to perfection.  Sprint had to sell the farm yesterday just to have the pleasure of carrying the I-phone.  In this environment that type of moat can evaporate.  Being first in the coolectove conciousness never lasts.  If Apple loses the momentum for one quater carriers will push back on pricing, as will app developers, and evryone else who is presently being reamed by Apple.  They are starting to hit roadblocks at evry turn.  RImm is curing their app problem.  Samsung and Apple are slagging each other in court all over the place.  Samsungs tab is hung up by Apple.  Samsung is not taking it lightly and is trying to block the new phone. 

 

Then there is the price for the consumer.  If Htc, samsung et al sell the same device as apple for cheaper apple may find themselves in a price war.  Margins across the phone business are going to erode.

Without jobs visibly at the helm they could lose their cool edge very quickly.  I figure apple is moving from fast grower to slow grower now, or at least very soon.  When that haapens and the pe ratio or pcf ratio moves into the double digits the stock price will level off to say 150 per share.  It is really a question of when.

 

The typos are due to using my Ipad which is truly a great device but certainly duplicable by anyone else. 

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Without jobs visibly at the helm they could lose their cool edge very quickly.  I figure apple is moving from fast grower to slow grower now, or at least very soon.  When that haapens and the pe ratio or pcf ratio moves into the double digits the stock price will level off to say 150 per share.  It is really a question of when.

 

The typos are due to using my Ipad which is truly a great device but certainly duplicable by anyone else.

 

See the slow down?

 

http://www.asymco.com/2011/07/20/apples-growth-scorecard-for-second-quarter-2011/

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Apple won't slow down immediately, but they are much more likely to miss the next round of innovation without steve jobs.  He is a very  unique person who has the ability to mold together consumer fashion, art, technological trend, marketing methods all together.  This combination of abilities was something he has always had, even when he was young, so I think for someone to fill that shoe is really hard.  There maybe people out there who might have some of those qualities, but unlikely all of them - steve jobs is a product of chance too.

 

He is kind of like Michael Jordan - the most gifted natural athlete, the hardest worker, the most ambition to win, the most clutch, the most skilled (lowest turnover ratio despite highest usage rate for some seasons).  If you had any 2 of these qualities you would be an all-star; if you had 3 you would be considered a top 5 player in the league at any given period;  If you had 4 you would be in the hall of fame; if you had them all you would become a legend.

 

This is how Steve Jobs is - a combination of qualities that have a very small chance of coming together on a single individual.  It just doesn't happen that often.

 

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My point is getting lost.  I have watched this happen during my investing career a few times.  Everything about apple is unsustainable over the medium term let alone the long term.

 

Simply put - Show me one company that has ever maintained the kind of growth in momentum that A has.  It has never happened and never will.

 

Its not because A is a bad company.  Its because competition or new ideas will materialize from somewhere and compress margins, or they may fall out of fashion for no reason other than consumaers are fickle.

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Another under-appreciated quality of Jobs is that he is a total control freak. Sometimes it takes that to achieve a vision. Lots of other people have great taste, but they compromise, settle, there's a bit of design-by-committee going on, they give up when the going gets rough, they don't dare tell others that their ideas suck, etc..

 

Jobs has both the great taste AND the ability to bulldoze ahead until he realizes his vision.

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My point is getting lost.  I have watched this happen during my investing career a few times.  Everything about apple is unsustainable over the medium term let alone the long term.

 

Simply put - Show me one company that has ever maintained the kind of growth in momentum that A has.  It has never happened and never will.

 

Its not because A is a bad company.  Its because competition or new ideas will materialize from somewhere and compress margins, or they may fall out of fashion for no reason other than consumaers are fickle.

 

But the the market is already treating the company like it has no growth at all. It's not priced to perfection. Its priced as if it's several years into a slowdown, while they've posted incredible growth. Obviously no company can generate 80% growth forever, but the street seems to already be pricing that expectation in.

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DCG,

 

But the the market is already treating the company like it has no growth at all.

 

This only is true if you think current margins and returns on capital are normal and sustainable and do not require any "growth capex / investment" to maintain.  Do you believe that?

 

We all agree on earnings, Apple seems cheap.  Their products have been great.

 

Is it really so obvious that the decline curve on their current revenues and margins isn't amazingly negative without continuous massive investment and successful innovation?

 

I can imagine scenarios where it works out, but I wouldn't think the current P/E really gives you much comfort... you have to build a P&L 3-5 years out and have some reasonable confidence what it will look like and that it will be the same or higher than now.

 

I don't have that conviction and I think the biggest issue value investors get into is looking at what a company has done and assuming it is ordained that that level of profit may be possible again or even normal.  I think you have to carefully examine that opinion here.

 

No position at all, but I'd certainly not be long if forced.

 

Ben - My 1 cent... cause that's all it's worth.

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DCG,

 

But the the market is already treating the company like it has no growth at all.

 

This only is true if you think current margins and returns on capital are normal and sustainable and do not require any "growth capex / investment" to maintain.  Do you believe that?

 

We all agree on earnings, Apple seems cheap.  Their products have been great.

 

Is it really so obvious that the decline curve on their current revenues and margins isn't amazingly negative without continuous massive investment and successful innovation?

 

I can imagine scenarios where it works out, but I wouldn't think the current P/E really gives you much comfort... you have to build a P&L 3-5 years out and have some reasonable confidence what it will look like and that it will be the same or higher than now.

 

I don't have that conviction and I think the biggest issue value investors get into is looking at what a company has done and assuming it is ordained that that level of profit may be possible again or even normal.  I think you have to carefully examine that opinion here.

 

No position at all, but I'd certainly not be long if forced.

 

Ben - My 1 cent... cause that's all it's worth.

 

Totally agree with Ben's 1 cent...even though it's worth more!  ;D  Cheers!

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