Harshest Critics Don't Understand Apple

NEW YORK (TheStreet) -- If you're not concerned about Apple's (AAPL) long-term health and prosperity, there's something wrong with you. Simple as that. You're either a fanboy living in denial or have yet to deal with some type of intellectual issue that impedes efficient cognition.

It's just not possible to conduct Apple discourse without bringing up Steve Jobs' legacy and the unlikelihood that Tim Cook can do it justice from some point forward.

But this doesn't render every move Apple makes today crappy and brainless. If Apple can do no right in your mind, check yourself. There's a good chance you're committing the same type of injustice I chided Lazard Capital Markets' analyst Barton Crockett for committing a couple weeks ago. You have a conviction -- bullish or bearish -- but you filter out, gloss over or refuse to meaningfully acknowledge any data that counters it.

I can't claim to know what's going on inside of TheStreet's Doug Kass' head as he formulates the opinion that Google ( GOOG) and, more specifically, Android is an Apple killer, but I'd love to be able to peel the onion back a bit.

While Kass has been right more than wrong on the stock (he might be batting 1,000?), that disconnect between company and stock, between the big money's whims and reality comes into play when he writes:
Google, unlike Apple, understands the importance of market share; it is going to price this device at breakeven -- about $300 to 350 and less than half of iPhone D(ud) -- and that is going to be much higher spec'd (better and bigger screen, processor, battery and camera).
Google is simply more innovative. It develops a broader ecosystem that includes newer and cooler devices like Google Glass, in addition to handsets and tablets, with numerous partners. It delivers better products, and prices them more aggressively to take market share. Meanwhile, Apple lives in the past and tries to compete on the basis of hardware features much more than it has at any point in the past.

Quite a bit of that is subjective. A fair share is suspect (given its relative unavailability, Google Glass is a non-factor). But, once again, it's the market share comment that gives me the courage to go after one of TheStreet's biggest and most-respected names. On so many levels, Kass, like so many other Apple detractors, misses the point.

First, objectively speaking, the most recent comScore U.S. data show that, among smartphone operating systems, Apple, despite popular meme, is the only one actually gaining market share.

Between the quarters ending April 2013 and July 2013, Apple's market share increased by 1.2%, topping the 40% mark. Apple sits 11.4% behind Android, which saw its market share slip by 0.2% over the same people. BlackBerry ( BBRY) continues to die a prolonged death, while Microsoft ( MSFT), appropriately, is flat at a wimpy 3%.

But here's where the cognitive skills come in.

In comScore's ranking of the top smartphone OEMs (companies that make the hardware) Apple remains number one by a relative mile. With a 40.4% market share, it's still growing and a full 16.3 percentage points ahead of second-place Samsung. Apple managed to grow without a new device. Samsung's share increased 2.1% over the same timeframe with too many devices to count.

You cannot look at the operating system and have a serious and honest market share discussion about Apple and smartphones. The OEM category provides a much more accurate, self-explanatory picture.

We could argue all day about "the importance of market share."

It's about as easy to achieve consensus there as it is to get a room full of Toronto Maple Leafs fans to agree on the team's goaltender strategy headed into the season. Do they give one guy the job and go with him all season or let James Reimer and Jonathan Bernier share the load? I could probably make an effective argument in either direction.

So I'm not saying Doug Kass and others are wrong to argue that Apple should cheapen its brand and grab some low-hanging fruit. There aren't many among us -- Tim Cook included -- who don't think this approach would generate more market share for iOS.

But I guarantee you this, lots of folks are in Apple-hate mode right now. If the company came out with a truly "cheap" phone, a 5S in multiple colors with multiple screen sizes they would be getting hammered for risking margins and profit. With some people right now the company can't win, even when it is winning.

There's lots to worry about in Apple's future. But if you're calling the world's most popular smartphone a "dud" and suggesting it should cut prices by "$300 to $350" you're mistaking the here and now for a future that has yet to arrive.

-- 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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