Is Apple Beginning Its Long Delayed Descent?
If there’s one thing I know, it’s service. I spent 18 months (and one day!) doing customer service at the nation’s largest credit card issuer. I’ll spare you the war stories, but when I left, my index score was 149. You can always measure a company’s success in the marketplace by how on or off the ball their service is, and how their employees handle themselves.
I’ve never been a Mac guy. I’ve used a PC for basic office use but our editors at WatchMojo.com use Macs, “naturally.” I was even toying with the notion of “upgrading” to a Mac soon. Not anymore.
While Dell and HP know that they create and ship boxes and don’t kid themselves, Apple tries to sell an image, a brand, a feeling, so when their CSRs drop the ball and the company fumbles, it hurts them twice as much, shattering the facade.
We ordered an Apple Airport Extreme Base Station. Extremely crap, I might add. When we wanted a more robust router, my colleague - the Mac fiend - suggested Apple’s product.
Frankly, my initial thought was: music players? Ok. Phones? Maybe. TVs? Sure, why not.
But routers that double up as hard drives and quasi-servers? Give me a break. Isn’t Apple stretching itself a little too thin? What happened to Steve Jobs’ razor-sharp focus? Did greed and hubris soften that edge?
I indulged him, we got one, it was a disaster. Judging by the feedback on the Apple site, it’s a hit or miss: people love it or hate it. Judging by the ultimate feedback, I think Apple had some quality issues with a batch, because eventually when I gave my serial number to someone, they acknowledged it was, well, crappy. But more on that later…
After spending some time setting it up, the thing would crash, and when it would not crash, the laptops (PC or Macs) could not read the hard drive. But everyone could print. Yippie!
I’d spare Apple, frankly, but then today came the last straw. A call to customer service to a) replace or b) get a refund.
I made the mistake of calling the number provided on Apple’s invoice. I spoke to &$%^#$%#%^*&. No, that’s not a swear word, I could not make out the agent’s name. I figured, no worry, I am sure Apple will leave me happy as a clam.
After given a runaround tour of Apple's circus of disservice insanity, I finally reached Steven, who, to his credit, finally spoke to a member of management. He came back to tell me that indeed, based on the serial number, they had sold me a crapbox, and that I could send it back in the next couple of days for a refund.
I think this experience could illustrate that Apple has begun its long delayed descent. It’s nothing personal. It’s just the way that it is. Apple’s stock says a lot:
December, 2000: $8.50
April, 2003: $7.10
February, 2005: $45
April, 2007: $94
In other words, in 7 years, the company’s stock has grown tenfold on the strength of their computer sales and their digital music players, the wildly successful iPods. But much the same way that Microsoft (MSFT) had Windows and Office (two trick pony), Google (GOOG) had search and advertising (two trick pony) I think that deep down inside, the real and fake Steve Jobs know full well that it will take a massive hit to keep that stock rolling.
MSFT could not do it. Google, it does not look like, could do it. Both are monopolies to varying degrees (let’s toss in “allegedly” to make our lawyers happy).
I don’t think Apple will be able to do it. John Dvorak and Peter Svensson say that they won’t do it. I don’t really know or care if they are right, but what I do know is that due to Apple’s hubris and thinking that they can launch any product in any market and win any client, they put out a clunker and then added insult to injury by refusing to help me ship back their crapbox… translation: no Apple TV or iPhone for me, and going forward, no Mac or iPod.
Judging by the tone and handling by their service team, I’d assume I’m not alone. The shield has been broken. Apple is on the descent.
How you like them Apples, Steve?
AAPL 1-yr chart:

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This article has 53 comments:
- akindman
- 59 Comments
Apr 10 03:21 AM- appleworker45
- 1 Comment
Apr 16 05:06 PM- alexbakertech
- 8 Comments
Apr 10 04:19 AMI own Apple long that I bought at 52 last summer. I am considering selling because of the potential to decline but its not for the superficial reasons you listed here. Chances are it will hit 105 before 90 anyways.
- macmatthews
- 10 Comments
Apr 10 06:47 AM- Macbth
- 38 Comments
Apr 10 07:40 AM- willrob
- 4 Comments
Apr 10 08:50 AMAt the Mac World roll out, Steve Jobs explained the battery life: as a music player: 15 f----- hours! As a phone-video player-internet browser: Five hours. Steve Jobs uses his daily. Do you think Steve Jobs is the sort of guy who would put up with 40 minutes of battery life?
Ashcan has an appropriate name: that's where his column belongs.
- ashkan karbasfrooshan
- 47 Comments
My Website
Apr 10 09:02 AMFolks, I cannot speak for Seeking Alpha, but I'll say this about our articles (the one SA refeatured). We have articles here that are analytical, others that are commentary. A few are written in a stream of consciousness style, this being one, written after my phone call with Apple.
So if all you have to criticize is the writing, grammer or punctuation, then that says a lot about the merits of the post, no?
We have nothing against Apple (and use them at our office here), we even placed them in our Top High Tech/Web Stocks of All Time:
www.watchmojo.com/web/...
Read that, or others we have, and please tell me they lack research, and are full of incorrect facts.
For the most part, our our site, we let readers comment no matter what they say, and initially I was surprised by the intelligence, tact and thoughtfulness of commenters who read this first via MacSurfer.
Today I see it’s picked up by Seeking Alpha/Yahoo! finance, so before the deluge of “this sucks” comments, let me simply say: this article’s main point was that no matter how much brand equity a firm has, service seems to be sloppy, and that is a shame. That’s all. Verizon is not Apple, they are a telco; how bad service affects their sales and stock price is very different than how it affects Apple, or a bank, or a retail store.
Now, because our blog touches on investing, advertising, technology, we just pointed out that Apple needs massive hits, and that means they will probably take risks that they otherwise would not. By taking on product risk, they might put out clunkers (like the Apple Airport Extreme) and turn off potential clients for their core products. Translation: the stock, in my eyes, can keep going up, but having risen 10x in a few years, there’s downside risk. I am neither long or short Apple, it was a simple observation of that reality, or at least, potential.
That being said, keep the comments pertaining to how great or bad Apple is coming. Loyal, fanatical users indeed.
- Richard Alvarado
- 47 Comments
Apr 10 09:34 AMIt's a bit silly to say "by taking on product risk", since if you don't take on product risk there would be no iPod.
Whats wrong with Attached Storage? Last time i check, not to many routers are able to do that. If anything it should be standard.
- reinharden
- 54 Comments
Apr 10 09:33 AMFirst, I would argue that you and your business associated clearly erred by thinking that Apple makes a "more robust" X. Apple's raison d'entre to a market is by making a "more usable, better integrated" X, a product "that just works". Clearly in your case, it did not. The downside to outsourcing manufacturing is that "these things happen". The upside is lower cost.
Clearly Apple failed you as a customer in not catching a flaw on the part of their manufacturer and, more importantly, on having less than good customer service when you called.
I'm surprised that you had such an encounter with their customer service as my limited experiences with customer service (in my 20+ years as an intermittent Apple customer) have been of much higher quality and most have resulted in my writing letters or emails to various parts of Apple commending the particular representative with whom I had dealt (one exception resulted in my writing a tirade to investor relations that resulted in an immediate return phone call from both investor relations and the management chain of the employee...amusingly, that was over a $0.99 misbilling on iTunes).
I'm also further surprised that swapping the product out at an Apple store wasn't an option.
Nonetheless, my experience with that particular product is that it has worked well in my SOHO, mixed 802.11b/g/n environment, with Linux, Mac, and Windows clients with both file sharing and print sharing. And I'm hoping that I'll see additional integration with the release of MacOS 10.5.
So while you may have indeed gotten a faulty box, it's by no means signs of the imminent downfall of Apple nor of their having made "an extremely crappy" product.
Were you truly interested in examining whether or not Apple's service had decayed, it'd be interesting to see what happened if you called in, say 3 or 5 times.
reinharden
PS: I'm sorry, I can't help but lightly notice the apparent irony in your seemingly taking offense at somewhat mocking your name (in a humorous fashion) when you've already mocked someone else's name...especially in light of your having, shall we say, a somewhat untraditional North American name yourself. On the other hand, Apple has never been known for its Canadian service..so perhaps that's the root cause. I wonder if they're still outsourcing their Canadian tech support to a Canadian contractor, that used to be the source of much, um, miscommunication.
- Jon T
- 310 Comments
Apr 10 09:41 AMA fraud.
- pritchet1
- 12 Comments
My Website
Apr 10 09:42 AMWhat did you do to get your wireless system up-and-running? Did you get another Apple unit or go elsewhere? And have you used a Mac yet? The reason the Apple computer systems are selling like hotcakes is because they are more robust than the competition and any OS can run on them that is designed for microComputers. The pain points are mostly responded to by Apple and their tech support has improved with time and experience. So has the overall computing experience.
Don't sell Apple "short". ;^)
Personally I like "them Apples" just fine - and I'm not Steve.
- twistedonion
- 1 Comment
Apr 10 09:55 AMNot to rain on your parade but Apple has been selling the Airport Extreme router for a few years now! Where's the product risk in a tried and tested product that has just been upgraded?!?
Apples core products used to consist of Computers, Disc Drives, Printers, Servers, Software. Now they've added iPods, Tv, How is a router not a "core product" for a company that sells hardware that needs to communicate. For goodness sake, if you had even done a bit of research you would find that Apple is a company that has had networking at the core of it's business model (Appletalk anyone?). When Microsoft saw no potential in the internet Apple created it's own browser and AOL type ISP (Cyberdog).
I might also add that I bought my first mac 10 years ago, the sales person advised me against it because of Apples decline and the fact they were "being bought out by Microsoft". Oh how they declined.
- Tom B
- 1733 Comments
Apr 10 10:26 AM"Apple TV loses out to XBOX 360? " Hardly. I am told the XBox sounds like a vacuum cleaner. I HAVE heard complaints about AppleTV picture quality, but the problem seems to be lack of HD content available on the iTunes store. This issue is likely to be very short-lived.
Apple base stations: I agree that you can often get better deals elsewhere, but you'd have to do more research to see who has set-up issues. I've had good luck with Buffalo Technologies. Most people regard the Apple products as solid.
Customer service: I have had excellent luck over about 16 years (about 8 incidents) and Apple has a very good reputation hear (Consumer Reports, others)
Computer Quality: No other vendor is even in the same ballpark. Great average build quality. Most CPU's quite quiet. Only consumer OS worth using --possibly excepting Ubuntu, if you are very "techie"
- WriterGuy
- 11 Comments
Apr 10 11:13 AMBut for a guy named Ashkan Karbasfrooshan to complain about the NAME of a tech support person? "Hello pot, calling kettle."
- ashkan karbasfrooshan
- 47 Comments
My Website
Apr 10 11:51 AMRe:
Q - "Did you update the Airport Extreme to the latest firmware?"
A - Yes. And my guys on Macs could only print, but not see the drive.
Q- It's a bit silly to say "by taking on product risk", since if you don't take on product risk there would be no iPod.
A - I never said all product risk is bad, quite the contrary, I just think that the stock is betting on an iPod-esque success for AppleTV or iPhone, and while the upside is priced in to the risk, the downside is not.
===
Reinharden,
In all fairness, "fanatical" in the context of users, is a positive thing; the fact that you assume it's a bad thing says more about you than me, with all due respect.
I never made fun of the person's name, I said I could not hear it, because the voice was becoming less and less audible...
Finally, I called Apple US and was transferred countless times from one dept. to another.
We can all say what we want, but the last person I spoke to, Steven, said that "looking at the log here, I realize we dropped the ball." Yet y'all can't see that?
Finally, my argument is not that service alone suggests a downfall folks, but at $80B+ market cap, for a hardware and increasingly consumer electronics company, it seems rich... and priced to perfection.
===
Robert Pritchett,
Indeed, yes, we use Macs at the office (as well as PCs), and one of the points was just that, that due to poor service I won't personally replace my PC with a Mac now... my loss, I am sure. And hence the cost of bad service. In the event that the iPhone and Apple TV fail to impress, then it might hurt Apple at its core products.
If none of you are willing to accept this risk (not a reality necessarily, but a risk nonetheless), then you are with all due respect blinded by your loyal devotion to AAPL.
I did not say Steve Jobs is crazy, nor did I say Apple users are going to hell.
It's a fine company, with admittedly superior products, but like all companies, its service could be better (at least in my experience) and the STOCK HAS HAD A CONSIDERABLE RUN UP AND IS PRICED TO PERFECTION, and hence risky.
C'est tout, why the personal attacks? Some of these comments make Karl Rove look like Santa Claus.
===
All to say, certainly, Apple certainly does not need a PR agency!
Cheers
Ash
- Yev
- 5 Comments
Oct 10 11:20 AMThank you
- Michael Fischer
- 1 Comment
My Website
Apr 10 11:55 AM- Abbi Adest, SeekingAlpha.com
- 6 Comments
My Website
Apr 10 01:36 PMSeekingAlpha reprints edited versions from all of our authors' blogs. We do not alter them to reflect outside comments.
- John Lazerow
- 68 Comments
Apr 10 11:55 AMWhile the Wintel world is continuing its disjointed, fragmented march to oblivion, Apple is creating a very USABLE and RELIABLE platform to manage and use all of one's digital assets whether it be on TV, the computer, iPod or iPhone, without requiring a degree in computer programming. This has the potetnial to create tremendous value for customers and stockholders alike. GET OUT OF MYOPIA FOR A SECOND AND LOOK AT THE LARGER TRENDS!!!
- Walter Morton
- 16 Comments
Apr 10 12:03 PM- ashkan karbasfrooshan
- 47 Comments
My Website
Apr 10 12:11 PMIs there something I am missing re:
"Presumably it doesn't fit *his agenda* to take account of the facts."
What agenda? The only fact I looked at, frankly, was a stock that has grown 10 times in one decade.
That's crazy talk... we are talking about Apple, right? For a second you'd think this is PNAC.
- alexbakertech
- 8 Comments
Apr 10 12:25 PMI'm a a 1 year reader and will begin to write soon as I am one of the writesr for the Ivy League Investment Journal and in the Investment Club at my specific University. Hopefully, I'll write something with enough fact that we can critique the content and not the lack thereof (but I also welcome criticisms).
- reinharden
- 54 Comments
Apr 10 12:30 PMPerhaps you consider it a good thing; however, the traditional definition is "filled with excessive and single-minded zeal" and the traditional thesaurus entries are:
1 <i>they are fanatical about their faith</i>
zealous, extremist, extreme, militant, dogmatic, radical, diehard; intolerant, single-minded, blinkered, inflexible, uncompromising, hardcore.
2 <i>he was fanatical about tidiness</i>
enthusiastic, eager, keen, overkeen, fervent, ardent, passionate; obsessive, obsessed, fixated, compulsive; informal wild, gung-ho, nuts, crazy, hog-wild.
As you can see from the first list of words that mean the same thing, "fanatical" is not traditionally a positive word. It implies an irrational enthusiasm blinded by faith. And thus, when you invoke that word, most who are not fanatical, turn off anything else you have to say.
If you wish to have a blog that evolves to a community, you'd be well served to not insult the members of the community you're seemingly addressing. If you just wish to push up your page counts (ala John Dvorak), well then, spinning up the Mac fanatics is always good for some page hits. ;-)
reinharden
- jessehogie
- 2 Comments
Apr 10 12:33 PMThis is all my opinion of course. And no, im not an Anti-Apple person. Quite the opposite. I am a die hard Mac-head. Hell I have been featured in Macworld for Automator actions. So this should hopefully put to rest the view of "Mac lovers are Nazi's" about everything Apple.
- ashkan karbasfrooshan
- 47 Comments
My Website
Apr 10 12:36 PMthat's actually a great point. i cannot speak on behalf of seeking alpha, but the truth is that i grew up on the business week's, economist's, fortune's and WSJ, and I saw them miss every single stock/company implosion of the past decade (enron, andersen, wcom, etc.) because the writers are a bit too chummy and close to mgmt's inner circles.
your comments, frankly, are not directed so much at SA as they are to the bulk of blogs out there. on our blog (hipmojo), we write meatier articles than you find on most blogs, sometimes they are emotional, sometimes they are technical.
but the fact is, it (and all blogs) are complementary to marketwatch, smartmoney, fortune, business week, etc. and not replacements. the level of access reporters get is obviously different, but that means they cannot easily offend. mind you, we've conducted numerous interviews with CEOs, etc.
but the point is: no one in their right mind should view material from blogs as a perfect or pure alternative to mainstream media, but much like the 2003 war and 2004 elections demonstrated, the mainstream media has simply dropped the ball... so the need for alternative sources of information is considerable.
in other words, as an investor, i first check the mainstream media, but given that these are usually reporting on items after the fact or do not want to fully speak their minds, i balance it out with info from blogs etc. i also, sit down folks, talk to clients, customers etc. and in this post, i am the customer... there's no agenda!
if the argument is that I cannot paint a picture of apple based on one experience, then you cannot possibly conclude that what we write on our blog is light on financial analysis etc. based on the fact that this post seems to have offended the apple fans.
alas, all i know is that mainstream media is learning to be more open and get back to reporting in lieu to boosting for the sake of being on mgmt's good books. and that's a good thing.
- reinharden
- 54 Comments
Apr 10 12:49 PMIt'd certainly difficult to tell from your original message that the name was indistinguishable simply because of volume. It comes across as, if you will, the typical American complaining about names, I'm sorry to say, such as your own. Thus the seeming irony. I personally make it a point to ask people to re-announce their names if I can't hear them and to spell them if I can't on my own. Thus I know who to complain about or praise.
re: Apple support
If you're still in Canada, there's probably room to question whether you should have called Apple US or Apple Canada. And interestingly if you purchased it in the US, it's vaguely questionable whether it's actually a supported product in Canada as the regulatory bodies sometimes differ between here and there. Of course, if you're still in the US, then this is all moot.
Nevertheless, while front line support clearly erred in not quickly and efficiently resolving your problem, it seems that after appropriate escalation on your part, at the end of the day, your problem was seemingly addressed by having you send in your product for replacement or refund?
With at least a veiled apology from Steven because Apple had "dropped the ball".
As an Apple shareholder, I'm saddened that you were not satisfied with your Apple experience; however, I'm not convinced that it rises to the level of a bad customer service experience. But obviously it wasn't me on the phone.
Stepping away from your original article and to your more cogently stated:
<i>but at $80B+ market cap, for a hardware and increasingly consumer electronics company, it seems rich... and priced to perfection.</i>
With $12B in the bank (~$14/share) and thus an enterprise value of "only" $68B, if you back out cash, they've got a trailing PE of around 28 and a forward PE of less than 20 (versus fiscal 2008). For the most part, few analysts have really cranked up the 2007 and 2008 earnings while seemingly waiting for the early returns on the iPhone, AppleTV, and such. And Apple's historic PE ratio is substantially higher.
So, crank in higher than forecast earnings and perhaps a return to historic PE ratios and the possibility of a resurgent stock market, and Apple is cheap. Or go the other way and Apple is expensive. But, for Apple to be "priced to perfection", I'd argue that it'd need to have a forward PE ratio up there with Yahoo at 40x.
reinharden
- reinharden
- 54 Comments
Apr 10 12:57 PMI've learned over the last year or two that it's almost better to read the blogs because this afternoon the online New York Times will report that a blog is reporting X and that evening the online Chicago Tribune will report that the New York Times is reporting X and tomorrow morning I'll read X in the print edition of the Washington Post. Whereupon every blog will write about it as fact.
With no mention about it all being based upon an unsubstantiated rumor started on a blog. :-(
Kinda like that John Dvorak "I was talking to a guy at Verizon who reported that the iPhone only works for 40 minutes". Facetious on its face, but now all over mainstream press and the blogosphere.
reinharden
- Tom B
- 1733 Comments
Apr 10 01:03 PMI look to a wide variety of "inputs", including Peter Lynch's favorite: familiarity with a company and its products.
- mike hough
- 25 Comments
Apr 10 01:01 PMWith so many readers providing negative feedback (= poor CSR) it is clearly time to find another blog. This article is 'anecdote' and hearsay. As such it is the typical biased nonesense we get from Dvorak (who by the way holds the world record for 180 degree wrong Apple predictions. he is simply off the planet). No serious writer would produce such a obviously biased article unless he was either payed to do so or simply crap.
If he is the US standard journalist it is easy to see why you guys screwed up so badly in eyrak!
My opinion of seekingalpha has taken a real nosedive. Get rid of him or you may have a George W Bush effect.
- mike hough
- 25 Comments
Apr 10 01:07 PMIn 15 years Apple has never once given me any trouble with service.
But, in your biased mind, that might be due to the fact that I have never had to call them!
- eyerhyme
- 5 Comments
Apr 10 02:40 PMFIrst off..."We ordered an Apple Airport Extreme Base Station. Extremely crap, I might add." Excuse me? I own one and it's the best thing out there especially with the EASE OF USE to set up. Every review I have seen has praised it's speed, it's transmission distance, and again it's EASE OF USE! Setting up other clients routers has been a pain in the ass!
" Judging by the feedback on the Apple site, it’s a hit or miss: people love it or hate it." I checked out the feedback.. . 9 out of 10 feedback is positive... that's not hit or miss! Ratings I saw were mostly 4 and 5 out of 5 stars.
Customer Service... why is it always rated highest in consumer reports, etc? your HP and DELL are quite often rated very low and most people I know who bought a Dell and call customer service are ready to throw the damn thing out, cut their losses, and shop elsewhere. If any company is on the decline... it's Dell.
"I spoke to &$%^#$%#%^*&am... No, that’s not a swear word, I could not make out the agent’s name." And your name is pronounced how?
"Apple is on the descent" Funny... are you reading the stock chart upside down or in a mirror... that looks to me like it's going up... and the iPhone hasn't even been released yet. Another one of your f*&k ups is "Apple’s iPhone lasts a mere 40 minutes?" Did you watch the Keynote at all? Do you seriously think they would release a phone that lasts only 40 minutes?
"I’ve never been a Mac guy. I’ve used a PC for basic office use but our editors at WatchMojo.com use Macs, “naturally.” I was even toying with the notion of “upgrading” to a Mac soon. Not anymore." Enjoy your PC and all it's viruses, security issues, Microsoft lies and "your wallet" attacks etc. etc. etc. Why is it there are so many people switching? Hmmmm.... I am a mac consultant, run a high end audio/video studio and just love you idiotic Mac bashers. M$ Windows works like crap! The huge fact that they are a sinking ship with thousands upon thousands of viruses should make people really question them... Would you buy a car whose locks "sometimes" works, sometimes starts, most of the time causes you to pull over to the side of the road due to some unexplained error, etc. etc. Again... in my studio, we WORK and are PRODUCTIVE!!! Clients love it and we get more work.
Please... do us ALL a favor... stop writing... or at the very least Mr. Editor... FIRE HIM! This is such a BS article that deserves a pink slip.
- Macbth
- 38 Comments
Apr 10 02:57 PMThat's just mean-
I wood fire you, if you wrked fr me.
- ashkan karbasfrooshan
- 47 Comments
My Website
Apr 10 03:04 PManyway, defend this folks:
when I spoke to them on thursday, they said: "sorry, we'll send over an email with shipping details in the next 24 hours," and gave me a case #.
24 hours came and went... so i called back today, thinking "all of these people defending apple can't be wrong, can they?"
so i called... and gave them the case #.
i guess the "holier than thou" attitude starts off with apple employees, cause they thought this was a big joke, the case # attached was to a "bob smith" (ironic, given my actual name), there was NOTHING included as notes in the case, and shockingly no email was sent.
Defend that folks. As shareholders, users, how can you possibly defend that?