Shorting Apple Long-Term

George F. Colony, writing for Forbes:

When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products.  

Colony’s pessimism is, unlike most Apple bearishness of late, perfectly reasonable. Apple did not fall to pieces when Jobs died, but no one with a clue expected it to. But Tim Cook and the remaining leadership team have yet to prove themselves in the long run. I’m not saying I agree with Colony (I don’t), I’m just saying his argument is reasonable. Apple is untested in these regards.

Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation. Like Sony (post Morita), Polaroid (post Land), Apple circa 1985 (post Jobs), and Disney (in the 20 years post Walt Disney), Apple will coast, and then decelerate.

Disney is the comparison I like best. And he’s right, Disney sputtered a bit in the ’70s and ’80s, post-Walt. But look where they are today: the leading family entertainment company in the world, right where Walt left them. Apple should be so lucky 40 years hence.

The big difference is that The Walt Disney Company was in no way prepared for life after Walt. Apple, I think, was.

Wednesday, 25 April 2012