What We Can Learn From The Defensive Apple Commercial

As I was watching the Heat/Spurs game earlier this week a new Apple commercial popped up that caught my attention. Maybe you have seen it by now as well. It was slow, simple and interesting with a defensive tone I’ve never heard before from Apple.

The three main points Apple seems to be trying to make:

  • We focus on making a few amazing products
  • We make products that make you feel good
  • We design these products in California

Apparently this is the start of a brand new ad campaign and it has Tim Cook’s fingerprints all over it. Many of the phrases used in the ad were declared at the recent Apple Dev conference.

You can see the commercial here if you are interested:
(After clicking the picture you have to scroll down to see the actual TV commercial)

I’m glad to see this ad because for me it answers some questions I’ve had. I now know that they are moving slow on purpose and they will continue to move slow as long as Tim Cook is in charge. Apple has no regard for shareholders. The company was pressured into returning $100B to shareholders through buybacks and dividends and they never had any intention to use that cash to purchase other companies to gain a competitive advantage or improve their service offerings. Apple may come out with another life changing product, but they may not. Leadership at Apple is not trying to grow revenue.

That last point is the most important point and its one that every Apple shareholder needs to consider.

But is Apple’s apparent dedication to being amazing enough? It could be. IOS7 is a big deal. After watching the video of WWDC I was struck by how awesome IOS7 is and that the experience of using an Apple product has been and will continue to be superior to all other devices for the next couple of years.

Just a few thoughts on each of Apple’s messages:

We focus on making a few amazing products – Nothing new here but for anyone hoping that Apple will expand into new frontiers forget it. I’m not saying they won’t make an amazing Apple TV but it’s obvious that the company will not be trying to expand its business or try new things the way Google does. Or the way most investors would expect Apple to. That may continue to be a difficult truth for investors and keep Apple trading at a low multiple.

We make products that make you feel good – I can identify with this because I’ve used many different mobile products and to me Apple is by far the best. IOS7 will cement that fact for a few years to come.

We design these products in California – So what? Deigned in California but manufactured and assembled in China. Is anyone going to care that the product is designed by Jony Ive and his team in California? That doesn’t make me feel like its a more American product. It makes me feel like they are trying to copy the successful “Made in Detroit” campaign that Chrysler put out a couple of years ago.

So what do you think? Is Apple telling investors that the slow moving product cycle is here to stay? Is it time we lower our expectations as users and investors and get ready for a new normal? Or maybe nothing has changed at Apple and we are just getting a better understanding of the direction the company has always been taking.

The defensive tone that is expressed throughout this commercial is very concerning to me. When a company starts defending its business strategy in a commercial I have to wonder where its headed and what the leadership is focused on. The leadership at Apple is certainly not focused on growing revenue or innovation. Not with Tim Cook.

Disclosure: I’m long Apple – in @ 437. For now.

1 Comment

  1. I don’t think they’ll be coming out with innovation at breakneck speed for the next few years. They’ll be tweaking existing offerings at new price points. I think that will serve them just fine for now, as they mature into a company that does ~10% revenue growth yoy.

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