Jim Cramer went on CNBC's SquawkBox earlier today and explained why he hates Apple (as a stock). But, as usual, Cramer's late to the game, since most tech enthusiasts and analysts have known about these issues with Apple's stock for months.
You can watch the full video below. Cramer talks about Exxon Mobile's downgrade and the potential Dell buyout as well
"Obviously they've got quite a bit of bad will over there because this was an extraordinary apology. It's like they're saying 'Look, we're not going to be Google.' Google being kicked out of China, basically, and saying we're not going to play by China's rules. Apple is saying 'Yeah, we're going to play by your rules."
Cramer raises an interesting point: It seems like Apple is willing to submit to China's bizarre restrictions, while Google remains a strong advocate of freedom, both politically and on the internet. This might be the only unique concept Cramer raised in his 13 minute segment on SquawkBox. The idea that Google and Apple are taking alternate approaches when it comes to China just shows how different these companies are.
"Let's call it as it is: There has not been a single piece of good news about Apple in 300 points. Today is just another day where the news is just horrendous. If you go over the Goldman downgrade...no they're not going to miss the March quarter, they're going to miss the June quarter. I am waiting for the company that says they're going to miss 2016."
There has been very few glimmers of light for Apple in the past few months. It seems like the only thing you hear about is Apple getting downgraded on Wall Street, or a product isn't working correctly, or a security issue lets you easily hack into iPhones. Quite the contrasts from news stories this time last year, when all people could talk about was the iPhone 5.
The issue is, for anyone who has a simple Google Alert set for Apple and APPL (Apple's stock ticker), this information is not new. On the contrary in fact; journalists have been writing about Apple's lack of good news since the day after the iPhone 5 was announced (an exaggeration...kinda).
"2016 is going to be a very bad year for Apple. Of course, they're going to have 400 dollar a share in cash, but it's going to be very bad."
Analysts are predicting a long-term slump for Apple in terms of sales. Will 2016 be the year that Apple is dethroned as the biggest tech company in the world? This is a little bit of a bizarre prediction on Cramer's part, since 2016 is still four years away. In 2007, no one predicted that Apple would be one of the most popular companies in the world when the iPhone 4S came out in September 2011.
"Whatever product comes out in September is already a loser...doesn't matter if we haven't seen it yet, it's already a loser."
This was a pretty shocking comment, but most analysts and even some reporters feel similarly and have been saying so for months (even me). When expectations for a new product are set too high, the company can't win. No matter what Apple does, the iPhone 5S or 6 or whatever Apple releases won't live up to the expectations of Wall Street, analysts, or, most importantly, consumers.
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"Apple's turning into the JC Penny of tech! Everything's keyed on Joe Fresh Apple!"
Huge diss. Apple prided themselves as being a high-end tech company that designs gorgeous product for the rich. Now, with retailers selling iPhones at dirt cheap prices, the Apple brand has been watered down drastically. But this was touched upon when Wal-Mart started selling the iPhone and slashing prices for the smartphone device.
David Faber: "I do wonder Jim...Tim Cook...the board...the security of his job. When do we start talking about it?"
Jim Cramer: "You just did...you put it into the public domain."
Probably the most interesting tidbit from Cramer's rant on Apple, but the least original. Tim Cook's job security has discussed extensively and with the company rumored to be posting lackluster quarterly results, its implied that Cook's on the hot seat. With three major Wall Street figures announcing on live TV that Cook was on the hot seat, you can be sure that dozens of journalists and analysts will write about it and that the average investor (finally) knows about it too.
"I think that there is a sense that the company is in a tailspin and it doesn't seem to matter what they do right now...These are all downgrades on growth and missed quarters. And when you see someone so certain that not only this quarter is bad, but the next quarter is bad, then I think tomorrow we gotta downgrade. And now they're saying 2014 is going to be bad!"
Again, Cramer is citing recent reports that indicate Apple's stock is not as strong as anticipated, and the company will be posting lower Earnings Per Share (EPS) year-to-year for the first time in the past ten years. Cramer may be right in saying there are some more tough times ahead for Apple.
David Faber: "And then we set a bottom for the stock, most likely."
"You need everyone to downgrade like everyone upgraded [Apple]. This is the classic "when are you going to hit bottom" when there is no one left who likes it. And what you hear every day is...there's still someone who likes it!"
Cramer and other Wall Streeters are upset over the reluctance to downgrade Apple. However, most feel that, by downgrading the stock, it could end up hurt the entire US economy, since Apple is so integral to our economic growth.
"Remember when [Steve] Jobs would do these great unveilings, mentioned in the Isaacson book — it was incredible. Now, you feel like if Cook were to do one of these shows, he would say 'We're about to announce maybe the most disappointing product we've ever had since The LISA. It's the LISA 2! This is the LISA 2 and nobody likes it and I don't know why we're doing it but it's all yours America! And China. And we apologize it's so bad.' It's a new product introduction: We're awful!"
A Jobs-Cook comparison that plays on the disastrous LISA computer Jobs unveiled in the early years of Apple. It is true that Cook and most Apple exec's can't match the showmanship of Jobs, who had the ability to sell anything. That being said, Cramer is just reiterating what most tech analysts already know: Most iPhone releases have incremental changes, not revolutionary ones.
"First of all I don't think it's really that awful. Second, there is an installed base that is really good. Third, if they had a "Wow" product, it would still matter. Fourth, if you moved the dividend up to 4%, then you'd see a floor in the stock, and people would be reluctant to downgrade it. But right now, just whatever they do, doesn't matter."
Cramer ends by outlining how Apple's stock could stop this tanking. Obviously a "Wow" product would help, but it seems like other companies, like Google with Google Glass, are becoming more innovative than Apple. What the company needs is to stop producing devices with barely any changes, but create something useful and innovative — even if it's not as groundbreaking as the original iPhone or Google Glasses.