Dismiss The CEO And Then Take On Apple?

| About: Apple Inc. (AAPL)

I am about to do something incredibly cheesy, but, with an E Street Band world tour upon us and Apple (NASDAQ:AAPL) finally sustaining new heights, I simply cannot resist.

Take a look around you (come on down)/ It ain't too complicated/ You're messin' with Apple Incorporated

Now you check over your shoulder everywhere that you go (oh yeah)/ Walkin' down the street, there's eyes in every shadow (oh yeah)/ You better take a look around you (come on down)/ That equipment you got's so outdated/ You can't compete with Apple Incorporated/ Everywhere you look now there's Apple Incorporated

Alright, you know it's total cheese when you turn beet red while writing it. But there's something to those lines, tweaked just a little for the occasion. Apple Incorporated is killing its competition in more than one space. And, across industries, companies attempt to react to not only this dominance, but changing consumer preferences. Apple, of course, plays a key role in dictating these new, modern tastes.

But, for all intents and purposes, one sector and one company in a different sector have done virtually zero to competently compete in this reshaped world. In this article, I dig into the possibilities in those spaces, but first I consider three areas where companies have taken impressive steps to compete with Apple and/or adapt to the 2012 "smart" consumer.


These instances might represent the most impressive examples of adaptation. And, I say in not-so-humble fashion, I predicted it last year:

Prediction No. 3

  • Big media consolidation.

Something happened in radio the other day that, because it happened in radio, will fly under the radar. Clear Channel (CCMO.PK) signed a deal with Cumulus Media (NASDAQ:CMLS) to include the latter's stations on the former's iHeartRadio web and mobile applications ...

In 2012, I expect some combination of television programmers, movie studios and cable or satellite companies to come to the same realization and take similar actions.

As streaming video services continue to proliferate, it will dawn on the content owners that it makes a heck of a lot more sense to run digital as something that looks more like the cable model ...

I expect to see the players with the most foresight - companies like Time Warner (NYSE:TWX) and Disney (NYSE:DIS) - join together in some fashion, be it partnership, merger or outright acquisition to stream their content from the same platform. The bigger and the more partners the better.

Endless examples here. You have the aforementioned radio deal. You have Disney and Comcast (NASDAQ:CMCSA). You have Verizon (NYSE:VZ) and Coinstar (NASDAQ:CSTR). And, of course, you have others on top of rumors of M&A and more partnerships.


Even the old and tired PC industry reacts. Of course, it might not work, but you've got to give Intel (NASDAQ:INTC) credit for pushing the ultrabook as a Mac alternative. And the shift from selling hardware to more of a focus on things such as services and storage at companies like Hewlett Packard (NYSE:HPQ) and Dell (NASDAQ:DELL) at least proves that they can read the indelible ink on the wall.


It would be a stretch to call this a reaction to Apple, but leading quick service chains like McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX) deserve credit for evolving in a world where places like Panera Bread (NASDAQ:PNRA) have upped the ante. Panera ought to put up a sign that says "Loitering Encouraged."

This phenomenon bears some connection to Apple, though. While we have always lived in a world where people like to have a nice place to "hang out," being seen pounding and touch-padding away on your Macbook (even if you're not doing any work) in a cafe setting screams "cool."

Endpoint - companies throughout the media, PC industry and parts of the restaurant space recognize the need for change. In some cases, we're witnessing profound transformations, particularly in entertainment delivery and consumption and mobile computing. Not everything for these various firms try will work, but standing still certainly does not equal competing with Apple Incorporated or mitigating the effects of its dominance.

The Losers

Consumer Electronics Retail and Research In Motion (RIMM)

In a recent Seeking Alpha article, I outlined the problems facing Best Buy (NYSE:BBY) and RadioShack (NYSE:RSH). We know they're embroiled in death spirals, so let's be positive and brainstorm some solutions. The same fundamental problem facing Best Buy and RadioShack continues to hold RIM back.

These companies continue to show an inability, an unwillingness or both to drastically change what they are doing - at its very core - and not only reinvent themselves, but reinvent and create new industries.

Consider RIM. First the CEOs step down as chairmen of the board. Token move. Position handed to a member of the current dull, boring and wholly ineffective team. Investors remain angry. The CEOs step down as CEOs, handing the job off to yet another member of the current dull, boring and wholly ineffective team.

And what's worse - and I hate to take a mini-shot at the guy, but it's relevant - the new CEO, Thorston Heins seems less dynamic than the previous regime, if that's even possible. That matters. Because the only way RIM can dig itself out of its self-excavated hole is to bring in relatively flashy and fresh new blood. The new CEO should come from Twitter, Facebook or Apple. It should be somebody who runs companies in perpetual start-up mode like they do at Apple and Amazon.com (NASDAQ:AMZN).

For whatever reason, RIM refuses to put this sort of thing out in the forefront.

While I'm not a big fan of more distracted driving, there's something here. RIM needs to team with other companies - content, delivery, you name it - to take this thing to the next level. To render the idea of being online in your vehicle as seamless as possible (meaning no seams at all).

That was one of the great things I pulled out of Adam Lashinky's excellent Inside Apple book. Steve Jobs would tell his developers, designers and engineers what he wanted. Often, it was literally impossible. Yet, he would not take no for an answer. A small team, often of one or two, would work behind closed doors and, lo and behold, they would come out with the answer. That's how a start-up runs. And that's how successful tech companies need to approach a world dominated by Apple. Undoubtedly, they should have been operating that way all along.

And, by a similar token, that's what Best Buy and RadioShack need to do. Investors and boards need to step up and terminate CEOs who have spent, for all intents and purposes, their entire lives in retail and, worse yet, in Brian Dunn's case, nearly his entire professional with one company. Clearly, Best Buy is as much Dunn's baby as anybody else's. He's come through the ranks. And that's impressive. But his actions show that he's too emotional about the whole endeavor.

Or, at the very least, we're seeing misdirected and ill-advised emotion. Investors have no passion for Radio Shack, RIM or Best Buy, therefore selling the same old to dream to them simply no longer works. It's a recipe for disaster. These companies need to hire a young gun who will make people say, "What? Are they crazy?" And then that person, who hopefully wants to throw up every time he or she sets foot in a soulless big box chain store, can completely reinvent the Walkman like Jobs did at Apple.

Disclosure: I am long AAPL, CMLS, INTC, TWX, VZ.