This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cook's Honeymoon Over at Apple

Stocks in this article: AAPL WMT AMZN GOOG

NEW YORK (TheStreet) -- The reaction to Apple's (AAPL) earnings doesn't prove that society stinks or that the tech market is about to crash. 

It proves that Tim Cook's honeymoon as Apple CEO is over.

In the almost two-and-a-half years since taking over from the late Steve Jobs, Cook has shown himself to be an able manager of Jobs' legacy. He has extracted huge profits from Jobs' ideas and has kept the iOS trains running on time.

But high-tech valuations aren't driven by able management, huge profits or trains that stay on their tracks. High valuations, in the form of extreme price-to-earnings ratios, come from doing something new, something different, something no one else is doing or can do.

When Apple launched the iPod, the iPhone and then the iPad, that's what it was doing. It was thinking different.

Apple hasn't had a new hit since Cook took over. It has tweaked its existing product line, it has scaled it, extracted money and profit. But it hasn't delivered a single new product worth mentioning.

I'm afraid "mobile commerce" isn't it, either. TouchID, as a way to enable and secure mobile payments, is a nifty thing to have, but it's not a game-changer. It's not transaction processing.

If Apple can help iPhone owners buy more stuff through TouchID, it's still just acting as one link in a long chain, and a minor one at that. The money in transactions comes from processing, it comes from banking and it comes from handling the merchandise.

Even if Apple announced a tie-up tomorrow with, say, Wal-Mart (WMT), turning that merchant's online operations into an Apple version of the Amazon (AMZN) superstore, it wouldn't move the value needle much. It would boost Wal-Mart, not Apple.


1 of 2

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!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

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