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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 - Get Report), somehow, gets clearance from Apple (AAPL - Get Report) 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 - Get Report) 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.

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