This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple Laughs When It Realizes Google Makes Computers (Update 1)

This story has been updated with additional information on Apple's share price and analyst downgrades.

NEW YORK (TheStreet) -- On Tuesday, Anton Wahlman set TheStreet and LinkedIn on fire with Google (GOOG - Get Report) Laughs at the New iPhones.

It is a splendid piece of financial media gold.

Earlier this year I published Google's 'Sneak Attack' Could Devastate 'Software Companies' Apple (AAPL - Get Report) and Microsoft (MSFT - Get Report). In that article, I noted that I had been wrong about Google. The company appeared (and still appears) positioned to challenge a dying Windows ecosystem and pass right by a relatively unambitious suite of Apple productivity software with its cloud-based offerings.

Even though this anecdote isn't about smartphones, I bring it up to show that I give Google its due as something beyond an advertising powerhouse.

Must Read: [video] Quick Take: Apple's a Drag, Verizon Sells Bonds

Plus, it's important to consider the direction Apple might be moving in vis-a-vis software and services as it fires a grenade at Microsoft with free iWork on all new iPhone and iPad purchases. Because, at Apple, software and services intimately link to the company's dominant hardware. That doesn't mean Apple is a software company -- it's not -- but software matters because it could help keep the Mac/iOS halo effect strong. While nothing has changed at Microsoft, Apple has stepped up its game -- and will continue to -- on the software front.

It's at this juncture where Wahlman, as nice of a job as he does trashing Apple, makes several grave conceptual errors disguised as biting analysis.

First, he's obsessed with price.

Second -- and I say this in the most lovable way possible because I know, like and respect Anton -- he's a tech geek too busy comparing specs to consider the realities of the consumer marketplace.

Third, he's running with the talking point Apple can no longer innovate without taking a reflective and critical look.

The tech media set Apple up to artificially fail this week, treating rumors of a cheap iPhone as fact and subsequently ripping the company for not producing something it never even brought up in the first place. And this had material ripple effects. A chorus of Wall Street analysts downgraded the stock, sending it down more than 5% on Wednesday. For better or worse, Wahlman leads the misguided pile-on.

I'm not sure how many times we have to go over this before it sinks in.

Apple does not compete on price. It doesn't have to. It should not. And hopefully it never will.

Apple doesn't produce products like bunny rabbits on honeymoon just to grab marketshare domestically or in a place such as China. It doesn't have to. It should not. And hopefully it never will.

If you don't understand this -- and it's clear Wahlman doesn't -- it's difficult to take the rest of any argument you make seriously.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
AAPL $111.60 0.00%
BBRY $7.16 0.00%
GOOG $646.67 0.00%
MSFT $47.00 0.00%


Chart of I:DJI
DOW 17,131.86 +47.37 0.28%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,838.6430 +8.1730 0.17%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs