The New York Times (NYT) ran a feather-ruffling article on Apple (AAPL) over the weekend, with a bumptious headline: "Has Apple Peaked?" It pulled up just short of a full-throttle takedown, but the answer to the self-posed question was a certain yes. The article is bound to impact the stock price in the early portion of the week, but it's a highly flawed piece of journalism and would best serve traders if wholly ignored.
The article's central thesis is that the iPhone 5 stands as a "canary in the coal mine," as The Times put it, indicative of the company's impending doom under Tim Cook, who succeeded the late Steve Jobs as CEO. The working theory is that the iPhone 5 mapping program, in which Google's (GOOG) product was replaced with an in-house and far inferior version, would never have happened under Jobs. Wrote the Times:
"Part of the reason [for the mistake] is obvious: Jobs isn't there anymore. It is rare that a company is so completely an extension of one man's brain as Apple was an extension of Jobs. While he was alive, that was a strength; now it's a weakness. Apple's current executive team is no doubt trying to maintain the same demanding, innovative culture, but it's just not the same without the man himself looking over everybody's shoulder. If the map glitch tells us anything, it is that."
This may just be the overstatement of the journalism and stock trading year.
Granted: Cook has received too much credit to date. Successfully running Apple in the year after Jobs' death is no great accomplishment. Cook has proven nothing and he won't until he proves he can shepherd new and innovative products into existence. Apple is such a great company that nearly anyone can serve as a capable caretaker over the short-haul. It's the next step that will be defining.
But by framing the map mess-up as the defining turning point, The Times goes way too far. This is not a matter of Apple's shares surpassing $700 recently or its relatively modest P/E ratio or its mountain of cash or its dividend of 1.5%. It's merely about staying weary for a market reaction that takes this article seriously.
The Times actually mocked the iPhone 5 as the RIM's Blackberry revisited (RIMM). Them's fighting words. They are also absurd words.
Here's the problem and it's a biggie. iPhones, even in the age of Jobs, were never without problems - even high-profile problems along the lines of this unwholesome map application. From the famous antenna glitch to the price-cut contretemps and so on, the troubles, while inarguably present, could be fixed (as this one too might) with a version of customer outreach and/or a free bumper or software upgrade.
The Times mentions none of this. They touch their toe briefly on 2008's MobileMe flub, but don't mention anything about previous iPhone 'disasters'. Instead, The Times uses the mapping mess up to damn Apple to a permanent second-rate status in their Jobs-less state. But these mess-ups also happened under Jobs.
Moreover, apropos of nothing, The Times warns us that Microsoft (MSFT) once seemed invincible and now they are not. When such thinly reasoned parallels hold sway, you know any reaction to this article - subtle or direct - should simply be ignored.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.