Moves, mistakes prove Steve Jobs era at Apple over, say analysts

With debt and lower margins, gaffes and strategy details, Cook's remade Apple with decisions former co-founder would not have countenanced

Apple is clearly not Steve Jobs' company any longer, analysts said this week, citing examples from Tuesday's earning calls with Wall Street.

Eighteen months after the co-founder and former CEO's death, Apple is a very different company, the experts argued, driven by current CEO Tim Cook to make moves Jobs would have dismissed out of hand, and making mistakes that Jobs would not have tolerated.

"I just don't think Apple is running quite as well as in Jobs' days," said Ezra Gottheil, analyst with Technology Business Research. "Mistakes have been made, like the poor performance of newer OSes on older hardware, Maps, the miss on the iMac, the neglect of the professional market."

Cook, in fact, rued the decision to launch the iMac, the firm's hallmark all-in-one desktop, last October even though Apple had no hardware to ship.

"If we could run it over, frankly, I would have announced the iMac after the turn of the year, because we felt our customers had to wait too long for that specific product," Cook said during the earnings call Tuesday.

Apple unveiled a slightly-thinner iMac last October, but did not begin selling the desktop until five weeks later, and then only the smaller of the two models. The larger 27-in. iMac finally started selling in mid-December, seven weeks after its introduction. Both were in short supply until deep into the quarter ending March 30.

During the bulk of those five months, Apple had few if any iMacs to sell, as it had pulled the previous models from its e-store and not restocked its brick-and-mortar outlets.

The lack of iMacs was a prime reason why Apple's fourth quarter 2012 Mac sales dropped 22%, and the shortages also contributed to the 2% downturn in 2013's first quarter.

"Is this a formula for disaster?" asked Gottheil. "No. Apple will find its rhythm again. It will be a less spectacular company, but still a solid one."

Other analysts saw the Cook era differently, but like Gottheil, used the latest quarter's financials -- and Apple executives' explanation of the results -- to make their points.

"This is where Apple becomes human," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. "Both the CFO and CEO said margins are going to get to a normal rate -- less than 40% -- and coming back to the ground. They've been in the stratosphere, but that's not going to happen again."

Jobs would not have allowed margins to fall to the levels Apple predicted this week, argued Moorhead. Nor would Jobs, as secretive as he was, have spelled out the company's strategy as clearly as did Cook and Peter Oppenheimer, Apple's CFO, in the Tuesday call.

"What was very telling from the series of questions with the CFO about gross margins was that Apple essentially mapped out its strategy," said Moorhead. "They basically said that they'll use penetration pricing on new products to scare competitors out of the marketplace. Apple will show up in a market, get a grip on it, then take lower-than-average margins on that product to drive the competitors into the sea.

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