Tag Archives: Tim Cook

News, Politics, Government

Questions The Analysts Should Ask Tim Cook

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By Chuck Jones, Contributor

’s June quarter results were a bit better than expected and while its guidance for the September quarter was a bit lower than the sell-side analysts estimates it wasn’t far off the mark. As a result the stock has rallied nicely over the past week moving from $419 to $447. After reading the transcript of the earnings call and going through the 10-Q these are questions that would be worthwhile to ask Tim Cook and Peter Oppenheimer, Apple’s CFO. My family and I own Appleshares. …read more

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Apple's Strong iPhone Sales Mask Falling Revenue Per Unit As Gross Margins Contract

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By Agustino Fontevecchia, Forbes Staff

Tim Cook was probably breathing a sigh of relief as shares in took off after a solid fiscal third quarter earnings beat on Tuesday.  And while investors were rejoicing from a welcome jump in the stock price, Apple continues to face intense margin pressure, particularly as its marquee iPhones and iPads saw continued erosion in revenues per unit.  Without the release of some bombshell new products, it will be different for Tim Cook to keep the wind blowing behind Apple’s sails. …read more

Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Apple Finally Embraces Its Value Stock Destiny

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By Adam Levine-Weinberg, The Motley Fool

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The slide in Apple’s stock price from more than $700 in September to less than $400 earlier this month was almost entirely brought on by fears that its growth was stalling out. Apple previously seemed to be rewriting the rules of the stock market as a high-growth large-cap stock. Apple’s string of successful products (iPod, iPhone, and iPad) encouraged investors to expect its high growth rate to continue indefinitely.

Apple TTM Revenue; data by YCharts

Since September, Apple has given growth investors a big dose of reality, as the growth trajectory has flattened out. While revenue was still growing in the first half of FY13, the growth rate was a modest 15% (that figure slightly understates Apple’s growth because Apple’s Q1 had an extra week last year). Moreover, Apple is not projecting any revenue growth for the current quarter.

Understandably, growth investors are now running away from Apple stock. However, that is not necessarily a bad thing, because Apple has reached the point where it is really a value stock more than a growth stock. CEO Tim Cook seems to have finally admitted that this is the case, and the new capital allocation plan announced this week solidifies Apple’s “value stock” credentials. As Apple accumulates a base of value investors who are less concerned with short-term growth rates, I expect the stock to recover and continue providing strong shareholder returns.

The value shift
On Apple’s conference call last Tuesday, Tim Cook stated, “[W]e acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012.” Apple’s gross margin has returned to the high 30% range: much higher than competitors, but significantly lower than its 2012 level. Combining that with slower revenue growth, Apple reported its first year-over-year profit decline in a decade on Tuesday.

While some pundits like Jim Cramer have decried Apple’s lack of growth, Apple management is clearly trying to change the conversation to value. By allocating an additional $50 billion to share buybacks between now and the end of 2015, Apple’s leadership team made a clear statement that they believe the stock is undervalued. Buying back stock will reduce Apple’s share count, entitling remaining shareholders to a larger piece of Apple’s earnings.

Of course, this would not be much consolation if Apple’s earnings continue to shrink. However, value stocks can still produce earnings growth; they’re just not expected to grow at a double-digit rate for an extended period of time. For Apple, new product categories, new iPhone carrier partners, and a cheaper iPhone are all potential revenue growth drivers. These opportunities won’t be able to return Apple to the 50% growth rates investors enjoyed in much of 2011 and 2012, but they should catalyze more modest earnings growth. Modest growth and a generous cash allocation strategy — typical of value stocks — could make Apple a great stock for long-term investors at its recent price around

Source: FULL ARTICLE at DailyFinance

Science & Technology

The iPad Will Lead Apple's Next Wave Of Growth

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By Anthony Wing Kosner

Following Apple is like contemplating the big waves in a Hokusai print. Successive lines of iPods, intermixed with iPhones and then iPads rise and crest relentlessly. For a while it seemed like the established interval between those waves was shortening, but Tim Cook‘s comments at Apple’s earning call on Wednesday indicated that a quickened pace was not sustainable.

Source: FULL ARTICLE at Forbes Technology

News, Politics, Government

is Apple Looking For A Replacement For CEO Cook?

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By Gene Marcial, Contributor

Is Apple  (AAPL) secretly searching for a new chief executive to replace Tim Cook? Some Wall Street sources close to some Apple executives say such a move is afoot, although there’s yet no available evidence that the board of the once-mighty top tech-innovator is officially in such a game-changing mode. But if it isn’t yet pursuing such a goal, it should, according to some big stakeholders, who have trimmed their Apple holdings. 

From: http://www.forbes.com/sites/genemarcial/2013/04/21/is-apple-looking-for-a-replacement-for-ceo-cook/

Business, Finance, Occupation & Industry

The Chinese Media Bashing Turns From Apple to Microsoft

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By Evan Niu, CFA, The Motley Fool

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First, there was Apple . Next, there was Microsoft . No, I’m not just talking about the initial rise of the PC decades ago; I’m referring to the Chinese media bashing tech companies over warranty practices.

For the latter half of March, state-owned CCTV in China ran a full-fledged smear campaign against the Mac maker, alleging that the company’s warranty practices favored consumers in other countries and that Chinese buyers of Apple gear were being treated unfavorably, particularly when it came to iPhone replacements.

Since China is Apple’s second-largest market by revenue with $26.6 billion in trailing-12-month sales, the company rightfully acted quickly, with CEO Tim Cook personally issuing an apology appealing directly to the Chinese public. In it, Cook acknowledged that there had been some miscommunication that could have contributed to the perception that Apple was being arrogant in not responding to media requests (which is really just standard practice for Apple). The apology was well received, and the Chinese media almost immediately changed its tune, praising Apple’s prompt reply.

Bloomberg reports that China‘s state-owned radio, China National Radio, is now targeting Microsoft. The issue at the heart of the attacks again relates to warranty practices, this time for the software giant’s Surface tablet. The device should be considered in the same category as notebook computers, in which case local laws require a one-year repair warranty covering the entire device along with a two-year warranty for crucial components. Microsoft currently only offers a one-year warranty for both.

A China National Radio reporter said the two stories were not related.

The big difference is that Microsoft has a lot less to lose than Apple does. Microsoft has always had difficulty in China due to rampant software piracy. Surface launched in China in October, and Microsoft’s sales can’t have grown that much since then (although Microsoft doesn’t disclose Surface figures).

The media bashing Surface may sting Microsoft, but the Middle Kingdom isn’t nearly as important to Steve Ballmer as it is to Tim Cook. Don’t expect any apologies from Ballmer.

It’s been a frustrating path for Microsoft investors, who’ve watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He’s also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

var FoolAnalyticsData = FoolAnalyticsData || []; …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

After J.C. Penney, Should Ron Johnson Head Back to Apple?

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By Austin Smith and Eric Bleeker, CFA, The Motley Fool

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With Ron Johnson, the “wunderkind” of the Apple retail experience, out of work and Apple in need of some new retail muscle for international expansion and potentially new product launches, it may make sense for Tim Cook to recruit him back to the mothership right now.

Ron Johnson has long been regarded as a critical player in the smash sucess of Apple’s iPhone and iPad products, both of which took off after he created a clean and highly interactive retail experience for customers to sample Apple’s latest gadgets. 

With the rumor mill spilling over about Apple’s newest potential product launches, a new version of the Apple TV (iTV?) and the iWatch, not to mention a crucial big expansion into China, Apple may need Ron Johnson more than ever.

After Apple has fallen about 30% while the market has rallied, it would seem that Wall Street has made up its mind about the company, but for everyday investors the debate still rages as to whether Apple remains a buy. The Motley Fool’s senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is Bank of America a Better Buy Than Apple?

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By Robert Eberhard, The Motley Fool

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A year ago, Apple was in the midst of a blistering nine-month stretch, cementing itself at the top of the market. Meanwhile, Bank of America stood pat after its less-than-stellar showing in the Fed stress test, while other banks rushed to return capital to shareholders. Apple looked like a stock that couldn’t lose, while Bank of America… well, was Bank of America: the stock so many love to hate. But since October, these stocks have switched places. Could the formerly scorned bank now be a better investment than the once-hot tech superstar?

BAC data by YCharts.

There’s no magic metric that can answer this question once and for all. With literally hundreds of data points available for comparison, let’s look at a few to see who comes out on top.

Valuation
Based on P/E ratio, Apple wins by a landslide, trading at around 10 times earnings. Bank of America shows its struggles over the past year; its reduced earnings expanded its P/E to almost 50. If we can believe the analysts’ and companies’ earnings forecasts, the gap between these numbers should narrow going forward, with Apple checking in at 8.6 times earnings and B of A at 9.2.

But price-to-earnings ratios don’t tell the whole story, and each balance sheet shows hidden value. Bank of America, the second-largest bank based on total assets, is currently trading at a 46% discount to book value. Apple, on the other hand, has a $137 billion cash hoard that it’s reluctant to part with, its year-old dividend notwithstanding. Though I like dividends as much as the next guy, the deep discount of B of A is slightly too enticing at this point, and its annual dividend will surely be more than $0.04 per share before too long.

Management
Bank of America CEO Brian Moynihan wasn’t in charge when Bank of America truly descended into madness with its acquisition of Countrywide, but he has done an admirable job extricating the bank from billions in bad loans related to the acquisition. Nevertheless, the bank is still facing billions of dollars in potential liabilities before it is completely out of hot water.

Tim Cook has done a great job as Apple’s CEO after taking over for the late Steve Jobs, but his honeymoon period could be coming to an end. Apple hasn’t truly released a new product since Jobs’ death — just upgrades — and the iPad Mini is a device that Jobs probably would have never released. Still, Apple and its products have a devout following, and the company still has little problem selling billions of devices every time it brings something to the market.

Business & risks
Each company is at a different kind of crossroads. At its core, Apple is based on innovation, and it could be just one new (or improved) product away from its …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is Cook Better than Jobs for Apple?

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By Joe Tenebruso and Richard Engdahl, The Motley Fool

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Joe Tenebruso’s “Tier 1 Portfolio” has been beating the market handily since its inception. In this series of interviews, Joe talks about what makes a Tier 1 company, and which stocks make the cut.

There’s no denying that Apple is still feeling the impact of losing Steve Jobs. But shareholders might find that they like Tim Cook just fine in the long run.

There’s no doubt that Apple is at the center of technology’s largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool’s senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Joe Tenebruso and Richard Engdahl“, contentId: “cms.30269”, contentTickers: “NASDAQ:AAPL”, contentTitle: “Is Cook Better than Jobs for Apple?”, hasVideo: “True”, pitchId: “1”, pitchTickers: “NASDAQ:AAPL”, …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Apple's Done This Before. Can It Do It Again?

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By Evan Niu, CFA, The Motley Fool

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There have been quite a few things that only Apple could have successfully pulled off. The ability to commandeer legally owned trademarks is on that list. Apple’s done it before — can it do it again?

The most prominent example of this was when Apple repurposed two of networking giant Cisco Systems‘ trademarks and made them its own. Both iPhone and iOS were once the property of Cisco. Apple famously unveiled the original iPhone in January 2007 without obtaining the rights to the “iPhone” trademark in advance, settling with the networker months later after the fact. However, Apple did ink a deal with the company over its use of IOS when it rebranded its mobile operating system platform in 2010.

The broader media has now taken to casually referring to the long-rumored Apple TV set as the “iTV,” even though iTV is also an existing recognized trademark that’s owned by British commercial television network ITV (uppercase “I”). In fact, when Apple first unveiled its first-generation set-top box for local streaming, it originally referred to the device as the iTV. Steve Jobs pointed out that this was just an internal code name, presumably due to some trademark issues.

Original Apple “iTV” unveiling. Source: Engadget.

A few months later, when Apple dropped the “Computer” from its name and unveiled the iPhone, it rebranded the device as Apple TV. In 2010, the company was rumored to be exploring a rebrand to iTV again, which caused a ruckus with the Brits. ITV Network said it has a very strong brand and has numerous registered trademarks, with exec Mike Large saying the network has “vigorously defended” its IP in the past.

There’s also the U.S.-based iTV Entertainment, which pre-emptively issued a press release roughly a year ago, warning Apple not to infringe on its trademark. iTV Entertainment noted that the ITV network appeared to have abandoned its U.S. trademark application in January 2012, and that ITV exec Paul Dale tweeted about being at Apple’s Europe headquarters.

iTV Entertainment hints that ITV Network may have inked a deal with Apple, saying the network “conspicuously” reversed its position and now denies it would take action against the Mac maker. iTV Entertainment is looking to finagle a license agreement.

Barring any official deals, Apple is unlikely to try to commandeer any trademarks these days. This is because Tim Cook is known to be a much more conservative leader that tends to play by the book, while Jobs was accustomed to simply willing things into existence. No other tech executive has been known to launch a breakthrough product that directly encroaches on legally owned trademarks, only to sort out the details later.

That’s just another way that Tim Cook differs from Steve Jobs. The only way that the rumored set is called the “iTV” will be if Cook scores the rights first.

Is Apple a buy? The Motley Fool’s senior technology analyst and managing bureau chief, Eric …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Apple's China Snafu: Epic Fail, or No Big Deal?

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By Adam Levine-Weinberg, The Motley Fool

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Apple CEO Tim Cook recently issued an apology to Chinese consumers after state-run media outlets (most notably China Central Television) subjected the iPhone maker to withering criticism about its warranty policies in China. The controversy centered around Apple’s policy of repairing broken products rather than replacing them, as Apple does in many other markets. Media outlets claimed that Apple was therefore taking advantage of Chinese consumers, and Apple was accused of “unparalleled arrogance.” In his apology to Chinese customers, Cook vowed to improve customer service and reiterated the company’s concern for customer satisfaction.

China is a very important market for Apple. “Greater China,” which includes Taiwan and Hong Kong, is Apple’s second-largest market, and revenue has been growing rapidly there. In January, Tim Cook stated that he expects China to eventually surpass the U.S. as Apple’s top market by revenue. However, if the recent media campaign against Apple gives rise to a full-blown consumer backlash against the company, it could severely disrupt Apple’s growth trajectory there. Fortunately, I believe that Chinese consumers are by and large savvy enough to see through this “scandal,” which has been completely manufactured by the state-run media. Moreover, the media appear to be toning down their rhetoric in light of Cook’s apology.

How big is the risk?
On Monday morning, analyst Glen Yeung of Citigroup (a prominent Apple bear on Wall Street) compared Apple’s recent troubles in China to a similar campaign three years ago that targeted Hewlett-Packard . In that case, numerous consumers complained of overheating problems in their HP laptops. While HP offered extended warranties for some of the affected models in China, it was offering superior warranties in the U.S. This provoked complaints of discrimination in the media. According to Yeung, HP lost 42% of its market share in China in the 12 months following this fiasco. Yeung suggested that a similar backlash against Apple (if it materializes) could knock as much as $3.62 off Apple’s EPS.

Is the risk real?
However, many Chinese consumers seem to be taking a skeptical view of the media’s criticism of Apple. Numerous (Western) news reports have quoted Chinese citizens who believe that state-run media outlets are criticizing Apple in order to divert attention from the government‘s failings. This viewpoint was supported by the revelation that various celebrities had been recruited to criticize the company on Weibo, a Chinese microblogging site. Others in China speculated that CCTV may have been trying to extort ad revenue from Apple. Many citizens also pointed to much more serious consumer rights violations by state monopolies that are ignored by the state-run media.

By Tuesday, Chinese media seemed to be ending their attack on Apple, praising the company for its quick apology and its promise to improve its warranty policies. Media outlets rightly noted that Apple is incredibly customer-friendly compared to other American companies operating in China (not to mention Chinese-owned companies).

Catastrophe averted — …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Apple's Folding Future

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By Forrester Research, Contributor

Ever wonder what’s going to happen next in smartphones? After the conservative iPhone 5 and the relentless and surprising onslaught of Samsung, it’s clear that Apple’s next move in the space will have to be revolutionary. Ennui has seeped into the minds of some Apple faithful as they have become bored with their phones, and envious with what’s happening over the fence in Android’s backyard. The iPhone 6 (not due for another 15 months) will be a signal moment for Tim Cook and team — it must astound and amaze, all without you-know-who leading the charge. This will either be a first step toward Sonyland or a breathtaking victory for the new regime. There will be no room for the careful incrementalism of the 5. …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Why Apple Initially Rallied Despite a Goldman Cut

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By Evan Niu, CFA, The Motley Fool

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Here’s something you don’t see everyday: Apple shares initially rallied today despite analyst pessimism, though they ultimately gave up most of those gains. In recent times, the slightest inkling of analyst skepticism has been enough to trigger relentless selling, yet today Apple bucked that trend even after Goldman Sachs trimmed its models for the Mac maker.

No conviction
Analyst Bill Shope has taken Apple off of Goldman’s Conviction Buy list, although Apple is still a “buy” in his book. Shope also knocked down his price target on the Mac maker from $660 to $575. Apple wasn’t alone, as Shope has become negative on the broader tech sector, in part due to deteriorating conditions in the PC market.

Schope downgraded Hewlett-Packard from “sell” to “neutral” on the belief that shares have gotten frothy. HP had doubled from its November lows on investor hopes that the turnaround is progressing swimmingly, but Schope has pegged just a $16 price target on the PC giant.

Apple needs upcoming products to reinvigorate momentum, and Schope doesn’t believe the recent upgrades are driving market share gains as previously expected. The analyst acknowledges that Apple’s business model makes its cash flows “far more resilient,” but is still becoming less optimistic.

The downgrade is peculiar for a number of reasons. Just one and a half months ago, Goldman went to bat for Apple after Tim Cook spoke at the investment bank’s Technology and Internet Conference. Schope came out with some bullish comments, reiterating its Conviction Buy rating and $660 price target right before Valentine’s Day.

A couple weeks later, Goldman dubbed Apple the most undervalued stock within its coverage universe, based on prices and price targets at the time. How much can change in less than two months? Evidently, conviction doesn’t go a long way at Goldman.

A Chinese change of heart
Instead of focusing on the Goldman trim, investors are being encouraged today by reports that Cook’s apology to Chinese consumers has immediately begun paying dividends.

Over the past couple weeks, state-controlled media outlets in China have embarked upon a smear campaign, bashing Apple’s warranty and repair policies and (inaccurately) alleging that Apple’s policies put Chinese consumers at a service disadvantage relative to their U.S. counterparts.

The Chinese government has launched smear campaigns in the past against foreign companies, and Citigroup analyst Glen Yeung used HP as a proxy to estimate how much damage Apple could be facing. Back in 2010, China undermined HP in favor of local PC vendors, and HP ended up losing roughly half of their PC market share. By the same rationale, if Apple were to lose half of its China market, Yeung estimated that could amount to $13.1 billion in lost revenue.

That estimate made for some gloomy headlines yesterday that contributed to Apple’s 3% sell-off, but ultimately the figure is an incredibly broad overgeneralization. Apple’s trailing-12-month “Greater China” revenue (including retail) is currently $26.6 billion, so simply cutting that …read more
Source: FULL ARTICLE at DailyFinance

Articles of Interest

Apple Should Create Stolen iPhone ‘Kill Switch,’ Says Top City Prosecutor

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By The Huffington Post News Editors

The top prosecutor in San Francisco wants Apple to design a “kill switch” for iPhones that would render devices useless after they are stolen.

San Francisco District Attorney George Gascon said he pressed an Apple representative last week to embed such technology in every iPhone to diminish the product’s value on the thriving black market for stolen mobile devices.

Gascon described the meeting as “very underwhelming,” and said he now wants to meet with Apple chief executive Tim Cook to discuss development of an iPhone “kill switch.”

Read More…
More on iTheft

…read more
Source: FULL ARTICLE at Huffington Post

Business, Finance, Occupation & Industry

Apple's iPhone Apology Weighs on Stocks

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By John Maxfield, The Motley Fool

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Steve Jobs must be rolling in his grave.

Early this morning, The Wall Street Journal reported that Apple has issued “an apology letter signed by chief executive Tim Cook that vowed to revamp aspects of its customer service policies in China after more than two weeks of pointed attacks by government-run media.” In case you’re curious (and can read Chinese), here’s the letter.

In it, Cook states: “We are aware that a lack of communications … led to the perception Apple’s attitude was arrogant and that we do not care and attach importance to consumer feedback. We express our sincere apologies for any concerns or misunderstandings this gave consumers.”

Apple was first targeted by the Chinese media in the middle of last month after the People’s Daily newspaper, the communist party’s “traditional mouthpiece” according to the Journal, accused the company of not responding to press inquiries and of treating Chinese customers differently from those living elsewhere. More specifically, the piece alleged that Apple fixes broken devices under warranty in China, rather than simply replacing them as it does in the United States.

In response to the original allegations, Apple posted a message on its Chinese website saying that it fixes iPhones with new components but then reattaches the original casing. It also claimed that “Apple’s Chinese warranty is more or less the same as in the U.S. and all over the world.”

Regardless of the veracity and motives behind the attacks, one thing is certain: The news is having a negative impact on Apple’s stock and is fueling negative sentiment among technology stocks more generally. With roughly an hour left in the trading session, shares of the technology giant are down 2.2%.

Following Apple‘s lead downward are virtually all of the tech stocks on the Dow Jones Industrial Average , which itself is off by 24 points, or 0.16%, at the time of writing.

Intel is the index’s biggest laggard today, down by 2% in afternoon trading. As my colleague Matt Thalman noted earlier, the chip maker found itself on the business end of an analyst downgrade. JMP Securities’ Alex Guana said he believes Intel’s full-year EPS will be lower than previously expected. He now expects it to come closer to $1.85 a share, versus his earlier forecast of $2.15 per share.

Shares of Hewlett-Packard aren’t far behind, down by 1.9%. Absent the dour sentiment among tech stocks, there doesn’t appear to be any concrete catalyst for HP‘s move. That said, given that HP is the Dow’s top-performing stock this year, up nearly 70% since the beginning of January, it’s always possible that traders are simply taking the opportunity to realize profits.

Is Apple’s stock doomed for good?
There’s no doubt that Apple is at the center of technology’s largest revolution ever and that longtime shareholders have been handsomely rewarded. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool’s senior …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why CEOs Must Always Be Innovators

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By Brendan Byrnes, The Motley Fool

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In the video below, The Motley Fool speaks with Roger Martin, strategy expert and dean of the Rotman School of Management at the University of Toronto. We discuss how leaders must look at innovation within their organization. Martin believes that CEOs must lead like their company’s life depends on innovation in order to stay one step ahead of the competition. He believes that investors should watch out if CEOs of companies in their portfolio aren’t leading in this way. 

A transcript follows the video.

The full interview with Roger Martin can be seen here, in which we discuss a number of topics including Bill Ackman, innovation, corporate responsibility, executive compensation, and how to pick out great companies. Martin is the coauthor of Playing to Win, a new book focusing on strategy written with former Procter & Gamble CEO A.G. Lafley.

If you’re on the hunt for a great stock idea, The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

Brendan Byrnes : How important do you think it is to have a CEO or top management that are constantly innovating, to take Apple as an example? Are you of the opinion that they’re in trouble now that Steve Jobs is gone and Tim Cook is in there — more of an operator and less of an innovator? Is that how you see it, or do you think both can be successful?

Roger Martin: I’ve never met Tim Cook, so I’m loath to make assessments of people I’ve never met, but to your fundamental question I do think, especially in the modern era of business, if you don’t have a CEO that really believes that his or her company’s life depends on innovation, I think it’s bad for you.

I just think, with more global competition, especially with really legitimate players in so many sectors in the low-cost geographies — whether it be Indian outsourcers in that business, or Chinese manufacturers in a whole bunch of businesses — if you’re not innovating, they’re going to be able to replicate what you’re doing now with a much lower cost structure and your advantage will be eroded that much faster.

You always have to be one step ahead, and I think you need a CEO who’s comfortable with that, not uncomfortable, not wistfully thinking, “If we could only just keep things the way they are,” or “If I could only go to the government and prevent those Chinese or Indian companies from entering our market.”

If that’s your CEO today, I just don’t see good things for you.

link

The article Why CEOs Must Always Be Innovators originally appeared on Fool.com.


Brendan Byrnes owns …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Home Prices Poised To Move Higher As Fear of Losses Has Dissipated

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By Joan Lappin, Contributor Remember that mob psychology dominates all asset purchases. It doesn’t matter if you are buying stocks bonds, precious metals or real estate. Last year Apple could do no wrong. If you didn’t own it, well, you were missing the most amazing stock.  How could you not own it? The drumbeat was constant creating a bubble.  Then, abruptly, the music stopped as the hedge funds who were supporting Apple into their fiscal year end on October 31st, began to bail out.  Right now the debate is over how low might Apple fall, how well can Tim Cook run the company and will they ever have another good idea. The asset class matters little. It’s all about human nature and not wanting to miss out on easy money. …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Will Berkshire Collapse Without Warren Buffett?

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By Austin Smith and Jeremy Phillips, The Motley Fool

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Jeremy Phillips asks Austin Smith whether Berkshire Hathaway  will stand the test of time or follow the path of many other great companies that have languished after the departure of their greatest leader, citing Microsoft, Starbucks, and maybe even Apple.

Austin Smith says that when visionary CEOs leave and hand over the reins to their operations guys, e.g., Steve Jobs to Tim Cook, companies stagnate. But Berkshire isn’t a creative empire reliant on new product development a la Microsoft or Apple. Its components, such as GEICO, can and do run on their own. Buffett’s job is merely to allocate the capital that Berkshire’s subsidiaries generate. Therefore, Smith concludes that Berkshire will continue to thrive, especially since Buffett has promoted excellent capital allocators to top positions. Phillips comments that Buffett’s hands-off managerial style has been just as integral to Berkshire’s success as Buffett’s investment prowess has. 

The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article Will Berkshire Collapse Without Warren Buffett? originally appeared on Fool.com.


Austin Smith owns shares of Apple. Jeremy Phillips owns shares of Apple. The Motley Fool recommends Apple and Berkshire Hathaway. The Motley Fool owns shares of Apple, Berkshire Hathaway, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is Apple Destined for a Lost Decade?

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By Steve Heller, The Motley Fool

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Imagine waking up 10 years from now and Apple has gone essentially nowhere. All that promise of continued iDomination fell completely short of expectations, and as a result, investors have become disillusioned with where Apple’s is headed next. Welcome to the Apple lost decade.

After all, the company has yet to prove that it can revolutionize entire industries without the contribution of Steve Jobs‘ visionary genius. To this very day, Apple is still riding on the coattails of Steve’s vision, and it appears the company is milking that for all it’s worth. For better or worse, Apple shareholders are left reconciling this potentially stark reality, and are also stuck with Tim Cook as captain of the ship. Cook, who has been highly regarded as a top-notch operations man — a great asset for the company’s supply chain, mind you — but is he really the captain of the ship? Does he possess the same sort of vision Steve Jobs had? Unfortunately, the world is still waiting for this answer.

The longer the world waits, the longer Apple’s P/E remains compressed relative to the market, which ultimately perpetuates this cycle of under appreciation. Currently, Apple’s P/E is being compressed by more than 40% relative to the market‘s current valuation. Does a company with the earnings potential of Apple deserve this sort of treatment? Well, if the company no longer thinks in terms of being revolutionary, investors may be in for another reality check.

Telltale signs
Although Apple is expected increase its smartphone volume along with the industry, it isn’t actually expected to gain much in the way of market share. Naturally, Google Android is expected to maintain its majority share in the coming years. Considering that Android has finally surpassed Apple in terms of smartphone Internet usage, it’s likely only a matter of time until the same thing happens in tablets.

On the tablet front, Android’s market share is expected to surpass Apple’s market share this year, thanks to the rise of low-cost small-screen devices. If we take what happened between Apple and Android in the smartphones and apply it to tablets, it starts with Android’s market share surpassing Apple’s, and ends with a shift in usage share away from Apple. These shifts could create a situation where Apple developers ultimately migrate over to the Android ecosystem. After all, an ecosystem is only as good as its App Store.

However, if Apple can just hold the line and simply sustain its current market share through 2016, it would mean that Apple will increase its iDevice volume by more than 70% from the end of 2012. In other words, the power of compounding could have profound effects of Apple’s business. It wouldn’t matter how un-revolutionary Apple devices are perceived to be because that sort of growth would almost guarantee that its share price would reach new heights. Perhaps investors have their doubts about this possibility?

Money on the table<br …read more
Source: FULL ARTICLE at DailyFinance