Apple Inc. (AAPL) has been one of the most celebrated stocks on Wall Street for the better part of a decade. Any prescient investor who parked $10,000 in AAPL stock 10 years ago would have well more than $200,000 today as the company became the largest publicly-traded company in the world.
But in the post-Steve Jobs era, CEO Tim Cook hasn’t brought any notable innovations to Apple. In fact, given the declining quality of its products, the Apple brand itself is in danger. Easily the company’s most valuable asset, as the Apple brand goes, so goes AAPL stock.
Several recent developments with Apple products lead me to question Apple’s future at the forefront of consumer technology:
Surprise! AAPL Products Are Prone to Viruses and Hacks
One of the biggest sells of Apple’s mobile devices and Macs has historically been their perceived immunity from viruses and vicious security breaches. That image is changing rapidly this year in the wake of a massive celebrity nude photo leak, an alleged iCloud hack by the Chinese government, and the newest revelations that Apple products were vulnerable to a newly discovered malware.
Cybersecurity firm Palo Alto Networks (PANW), has reportedly discovered a malware called WireLurker, which can infiltrate iPhones when they’re connected to infected Macs via a USB cable. The malware reportedly originates when infected apps on the Apple App Store are downloaded to a Mac computer.
Palo Alto Networks alleges that these apps have been downloaded more than 350,000 times thus far. So much for the impervious reputation Apple products once enjoyed. Unfortunately, the potential woes for AAPL stock don’t end there.
Strikes 2 and 3: Cheaper Products, Cruddier Software
If AAPL’s compromised reputation for security wasn’t already enough to dilute its brand, consider the fact that Apple is entirely shifting its long-held pricing strategy: it now makes lower-end, cheaper products aimed at the masses. With last year’s plastic, $99 iPhone 5c, the company took a huge step backwards, essentially conceding to the world that its brand ain’t what it used to be.
Add in the recent Apple “Bendgate” controversy in which iPhone 6 Plus users complained the phone was easily warped, and it’s crystal clear that quality either isn’t a huge concern for Apple or the Cupertino company simply can’t execute on its ideas. Either one is an internal failure and a huge concern for AAPL stock.
Apple’s own software, too, isn’t at the top of its game. Its recent iOS 8 update had some prominent problems upon its rollout, and the company’s botched attempt to overtake Google (GOOG) Maps with its own maps application backfired miserably and memorably in 2012. As of last year, the company was still buying up companies it thought could help it with Apple Maps.
Apple Maps still hasn’t caught up with Google Maps, and AAPL stock might not keep up with the broader market if its apathetic attitude towards its brand name persists.
As of this writing John Divine owns shares of AAPL stock, GOOG stock, and GOOGL stock, although if Apple keeps it up he won’t be a shareholder for long. You can follow him on Twitter at @divinebizkid.