We’re almost a quarter way through 2014, and it seems some Apple shareholders have ants in their pants. They’re impatient and want to see what Tim Cook’s team is going to do in a new product category, be it an iWatch, Apple television, or something else entirely. I guess it isn’t enough for Apple to be so utterly dominant in mobile computing, an industry trend that will keep chugging along for the next decade?
Let’s do a quick review of what Cook has actually said about new product categories this year. On the last conference call (January 2014), analyst Gene Munster asked, and Tim Cook offered up a very clear answer. Here’s a snippet of the relevant part of the transcript
Gene Munster: In the previous quarters, you’ve talked about specifically product categories multiple, and that’s different than variations of existing products. And that would be by the end of 2014. I just want to be clear that’s still on track, and consistent with some of the expenses that we talked about earlier in the call?
Tim Cook: Yes, absolutely. No change.
Later, in February Cook was interviewed by the Wall Street Journal, and when pushed to give up some detail about what’s coming, all he would say is that any “reasonable person” would consider what they’re working on to be a new category. This muddied the waters just enough to cast some doubt on the company’s efforts. Perhaps Cook thinks some people, who are less reasonable, will say Apple’s new stuff isn’t really new but instead a spin on some existing product?
So here we are at the end of March. Apple’s stock price is actually down a bit so far in 2014 while Microsoft, Google and the broader market indices are trading higher. I take a long term perspective on stocks, but most people don’t. So I get the frustration. But we have to remember that Cook said that a new product category would roll out this year, not this spring. Give the guy a break. We’re still very early into the year.
Here’s a quote from Cook’s answer to Gene Munster on the last conference call that I think does a nice job of summing up Apple’s thinking.
Tim Cook: I would just say, Innovation is deeply embedded in everybody here, and there’s still so much of the world that is full of very complex products, etc. We have zero issue coming up with things we want to do that we think we can disrupt in a major way. The challenge is always to focus to the very few that deserve all of our energy. And we’ve always done that, and we’re continuing to do that.
The key to what he said, I believe, lies in the phrase “very complex products”. Apple has always been amazing at taking complicated things and making them super simple. Maybe that’s what the new health initiative is all about? Maybe they have other big ideas we don’t know about yet. Either way, I agree with the company rolling out products when they are ready, not when they feel pressure from Wall Street.
The very best CEOs do not act because of Wall Street. They just act on business opportunities and Wall Street reacts. I want Apple to keep doing what it’s always done.
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Former sell side analyst, out-of-box thinker, consultant, entrepreneur. Interests: Wife & kids, tech, NLP, fitness, travel, investing, 4HWW.