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Apple's Biggest Mistakes Under Tim Cook

NEW YORK (TheStreet) -- The dumbest thing Timothy D. Cook has done as Apple (AAPL - Get Report) CEO is listen to other people, particularly the toxic peanut gallery of Wall Street analysts, self-interested and egomaniacal billionaires, financial media hacks and a misguided segment of tortured rank-and-file shareholders.

First, Apple should have never done a dividend or buyback. I was against the idea from the beginning. Not because, in and of itself, it's a bad idea, but because, from a theoretical standpoint, it's the type of thing that contributes to the erosion of the culture that made Apple great.

We don't respect that culture enough as Apple's primary catalyst; as such, "we" take it too lightly and do things to crush it. Tim Cook, the leader of "we," deserves the blame.

If you need earlier proof of where I stood (and stand) on this, consider a Seeking Alpha piece I wrote in March of 2012:

Must Read: Even Icahn't Save Apple

... It's about the slow and methodical, yet unintentional dismantling of a culture and a company that everybody agrees Jobs built, using a unique brilliance, not an all-too-common, by-the-book style.
To argue that Tim Cook "put his stamp" on Apple by going with the dividend and buy back is patently absurd. This is hardly original. Cook put everybody's mark but his own on the company with this move. It's even more frightening to think that Cook might actually agree with the crowd that he followed.

Cook answered to David Einhorn and Carl Icahn. These guys might act like they lost or didn't get exactly what they wanted, but that's crap. They have such large positions on an underperforming stock that all they sought was a way to pump their returns. These guys don't consider Apple conceptually because they don't care about AAPL. They care about their positions and making even more money.

Second, Cook should have never tied his compensation package to Apple's stock performance. Here's what I said at the time he made that decision:

This is not only a rebuke of Steve Jobs and the Apple way -- the very essence of what made Apple the world's greatest company -- it's a perverse validation of Wall Street and the stock market. As if Wall Street should play any role whatsoever in determining how much anybody from the CEO to the cleaning crew at Apple makes.

Which brings us to what really should be the lead story Tuesday ... how in the world does Wall Street have the right to dictate anything?

We're told AAPL is getting hammered this morning because it missed analysts' iPhone estimates. Do you really believe for a second that these people have enough of a handle on or knowledge of Apple's inner workings to make projections that will ultimately move the stock?

It's a complete farce.

But it's not merely society's fault or the inane workings of an irrational market to blame.

Because, third, even though iPhone 5c wasn't the cheap device the financial media made it out to be, it was close enough. Tim Cook lost sight of the notion that Apple makes nothing but high-end, top-quality, premium products. Swapping out the backside of an iPhone 5 with something that looks like plastic (whether it is or isn't) should not be the Apple way. In fact, it's the antithesis of it.

All of this segues nicely into why I'm so adamantly against Apple selling its products via low-end third party retailers.

You can look at each of these things I have warned about over the years -- dividend/buyback, listening to Wall Street in any way, going "cheap" even a little bit, selling in retail slums -- and call me crazy for nitpicking. But you're considering each occurrence in isolation. We tend to do that because we like things black and white. But Apple got to where it is now -- still the greatest company in the world -- by weaving a complex narrative.

At times, Tim Cook disrespected that. And here we are ...

That said, it doesn't mean we should be all doom and gloom. I still believe Apple will disrupt and destroy when it's ready.

It's just that Tim Cook could do a much better job managing the in-between time. That's one area where we miss Steve Jobs.

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

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks. Rocco Pendola is a columnist for TheStreet. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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