This Day On The Street
Continue to site
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

How Apple Could Become America's Most Hated Company

Driven in part by the actions of Facebook and Google, there's this sense that Apple must execute a strategy of growth through M&A to survive.

Our fickle perception of inaction, stagnation and lack of innovation at Apple (there's no question I'm guilty of this from time to time) doesn't necessarily reflect what's happening at the company. Put another away, Tim Cook likely has his act together.

I elaborate on this trajectory of thought in Apple Doesn't Need to Change, If Apple Needs Netflix, Tim Cook Needs a Clue and as far back as Apple: iPhone Doesn't Need to Be Revolutionary.

But there's something else at play that these M&A nimrods and certainly the soulless bunch that populates Wall Street fail to take into account -- Tim Cook cares about Apple's image. He cares about the way Apple looks in the bloodshot eyes of consumers, smart generalist Americans and people around the world. It's one thing for people to "hate" Apple because they consider the brand and its fanboys pretentious. That breeds admiration and aspiration. It's entirely another for people to hate Apple for the same or similar reasons as Canadians hate Rogers and Bell or Americans hate cable companies and, increasingly, Facebook.

Must Read: Investors Struggle With Faith In MannKind Prior To FDA Meeting: StockTwits

This is not to say Apple should not or will not make an acquisition someday. Or that other mindblowers (like, say, Comcast buying Yahoo!) won't happen.

But back up ...

The last thing Apple needs is to become creepy like Facebook and, to a lesser extent, Google. Nuance separates notions of building an empire and building a great company. Tim Cook understands this; Mark Zuckerberg doesn't.

Forget, as I have described in recent articles, that diving too deep into software and services (outside of joining Google to crush Microsoft (MSFT)) will hurt Apple's hardware-focused bread and butter business. And remember that the way people -- you, me, average investors -- view Apple matters.

Children do not have the run of the house at Apple.

When Mark Cuban became a billionaire he bought a basketball team. And now he goes on television and blogs to prescribe his vision for the world. That's cool. It's diffcult not to like or, at the very least, admire Cuban. He's living the dream.

Mark Zuckerberg let his success and riches go to his head. He spends billions of dollars to construct an empire and then tells Facebook users they ought to rejoice on the road to His dominance. They're going to live better lives because He thinks the things Facebook's doing are -- um like -- the coolest things in the world.

This non-strategy of empire building and prescribing your view of the world on decreasingly captive others will kill Facebook. Zuckerberg's building something like the American version of Canada's Rogers and Bell right before our eyes. He's drunk with power -- figuratively and literally.

Something more palatable will come along that will, in Zuck's words, connect us socially (or whatever crap he spews). And people will move to it until it oversteps its bounds. Then something else will come along and we'll move to it.

Tim Cook's smart and prudent enough to understand this, particularly as it relates to the delicate position Apple operates from. As such, he's not in this to build an empire. He's in it to sustain and grow a great company. There's little reason to bring massive resources in from the outside when you already have -- with relatively small tweaks and additions along the way -- everything you need on the inside.

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

Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 -1.04%
FB $118.06 0.54%
GOOG $695.70 0.48%
TSLA $222.56 -4.20%
YHOO $36.00 -0.03%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs