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
TheStreet Open House

It's Tough to Get Past the Idea That Tim Cook Has No Clue

NEW YORK ( TheStreet) -- This is exactly why I beat the drum so hard in articles such as Why Does Apple Let That Dump Walmart Discount iPhones?

Because this happens ...

And then this happens ...

I'm not going to rip Business Insider or Yahoo! Finance. Neither deserve it. Both outlets wrote perfectly legitimate and credible headlines. They took sane and logical queries from the objective information put in front of them.

But I am going to rip Tim Cook because, for as great of a job as he has done lately, he deserves to get ripped again -- endlessly, relentlessly -- on this particular issue.

He's executing -- rhetorically and in practice -- an inconsistent strategy.

Best Buy (BBY), somehow, gets clearance from Apple (AAPL) to knock $50 off of the price of an iPhone 5c. How Best Buy organizes that promotion -- with a gift card or whatever -- isn't material to the story. Best Buy should not have the ability to run these types of promotions in the first place.

It's bad enough that Apple lets Best Buy and other retailers sell its products. It's even worse that Apple permits these guys to effectively slum their products and dilute the brand. it means nothing to Apple's bottom line because, most likely, Best Buy or Wal-Mart (WMT) or whoever eats the cost of the sale or assumes the risk in the promotion; however, it means something to Apple's image.

While you can't collude to fix prices, you can use suggested and minimum retail prices for the folks you allow to distribute your goods. I worked at a bicycle shop that lost Specialized products for a period because it discounted too heavily and too often.

In one breath Tim Cook says Apple won't produce crappy products. Fantastic. In another he says, we never had plans for a "cheap" iPhone. And, because he deserves it, I applaud him. Then, in practice, he gives third-party retailers what appears to be carte blanche over his company's image.

It makes absolutely zero sense. You can rationalize with them all you want, but no short-term justifications exist for how poisonous this practice can be to Apple over the long run. If I'm missing something in consumer law that precludes Apple from having the level of control I think they do, that only strengthens the argument to not participate in these arrangements in the first place.

One of Apple's strengths has always been image control. Tim Cook must move aggressively to reestablish that control.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,071.22 -41.93 -0.24%
S&P 500 1,977.80 -5.05 -0.25%
NASDAQ 4,505.8520 -6.3420 -0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs