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. Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV