Credit: Reuters/Beck Diefenbach
If you want to see how Wall Street's view of the technology world is out of sync with the real value of Apple and other companies, simply go to a site like Yahoo Finance and call up a chart comparing the market share value of Microsoft and Apple over the last two years.
Since March 2012, Microsoft's share price has climbed 20 percent, while Apple's has slipped by more than 11 percent. In the same time period, Apple launched a bevy of successful products, including the new iPhone 5s and 5c, which sold more than 9 million units in just one weekend. What's Microsoft done? It launched Windows 8, arguably the least popular OS the company has shipped since Windows ME. Oh, and it lost a nearly $1 billion on the initial versions of the Surface tablet.
Almost as telling, and certainly more ironic, is what happened to Microsoft's shares on Tuesday: They jumped to a level not seen since the dot-com boom. Why? Because of the rumors that its next big product will be ... drumroll, please ... Office for the iPad.
If that product turns out to be disappointing (how much do you want to bet?), the share price will likely slip, but the point remains: Wall Street can be clueless about the real value of technology. If its judgement affected only investors, many of us might not care. But when bubbles pop or good companies get massacred, a lot of people suffer beyond the trading floor.
There's already been plenty of digital ink spent on discussions the wildly inflated values of startups and lunatic prices paid for tiny companies (hello, WhatsApp). But the disconnect goes deeper than startups, and it extends across the whole technology landscape.
There are few better examples of this myopia than the recurring calls on Wall Street and the punditocracy to fire Apple CEO Tim Cook, a move that would be a huge mistake.
The sanctity of Steve Jobs and the sins of Tim Cook
Cook pulls down a huge paycheck, but sometimes he must wish that all he has to worry about is Apple's supply chain, which is what he did as COO before Steve Jobs died. Following in the footsteps of Jobs has to the toughest act in all of business. Jobs brought Apple back from the dead, invented new product categories, and cultivated a ninja-like persona that captivated the media beyond all critical bounds (and both inspired and terrified Apple employees).
It's no wonder that the media (I'll get back to Wall Street in a bit) has a ready-made story line, represented very well by the title of the newly published book "Haunted Empire: Apple After Steve Jobs." The book's author, Yukari Iwatani Kane of the Wall Street Journal, writes that Apple is "a cult wrapped around a dead man." I have no idea if Apple employees really feel that way, and I'm not sure Kane does either, but I'm pretty confident that the legions of media fan boys who have turned so viciously on Cook are part of that cult. The Guardian's Charles Arthur has an interesting review exposing the book's flimsy case for its premise.
In the worldview of the unhappy cultists and writers, it's clear that no matter what Apple does, it ain't what Jobs would have done. Anything good the company does occurs only because Saint Steve put it in the pipeline; anything bad occurs because Cook screwed it up.