Goldman Sachs has dropped Apple off its list of must-own companies. Goldman-Saschs is not alone. Why? Because the company has ceased to offer hot new products.
When Steve Jobs died, I said this would happen on October 11, 2011. You can read my article here. Here is what I wrote:
What goes up eventually falls . . . unless is disappears into outer space and becomes statistically irrelevant. Gravity overcomes the inertia of upward movement. What goes up always falls.
Apple’s relentless descent to earth is inevitable. I can prove it in 15 words.
Here are the first four: regression to the mean. There is no way around this. This is the law of social gravity.
What kept this from happening earlier was the fact that Steve Jobs was a creative genius, like few other men in history. He also had this advantage: he was called back to save the company when its share price was $5. Without both roles – genius and savior – Apple would barely be visible. It might have gone bankrupt.
The person who replaces him will be a corporation man. He will not be a creative genius. He will also be someone who came up from the ranks as a Steve Jobs flunky.
Here is Apple’s plight: everyone in the outfit is Steve Jobs’s flunky, and everyone else knows it. Everyone bent low whenever Jobs entered the room. This position was not always in the form of a bow.
Steve Jobs was a mean-spirited, foul-mouthed, intolerant man. He told people publicly their work was “crap.” He humiliated subordinates. That was his style. He was a personal SOB. He is beloved in death only because he turned out to be right in the marketplace, over and over, but only in the post-1996 period. Before that, the technology was not there to let him implement his vision.
Nobody who is that inconsiderate, that much of a personal jerk, can get the cooperation of highly skilled people unless he makes them a lot of money.
There is no one to follow him. There will never be another Steve Jobs at Apple.
On October 14, 2011, Apple’s shares were at $422. The lemmings rushed in to buy. The price peaked at $700 on September 21, 2012. Today, the price is $430.
Apple is baked.