Analyst: Apple Love Is Like Muscle Memory
“If you think about the basics for Apple (NASDAQ:AAPL), it’s build the best hardware platform on the planet, build the best software and ecosystem on the planet,” Brian Marshall, an analyst at ISI, said on CNBC’s “Squawk on the Street” on Monday.
That may sound like one part tall order and one part happy talk, but it’s also basically true. For nearly a decade, with different hardware at different times, Apple did exactly that. The iPod proved to be a best-in-class music player, the iPhone revolutionized smart devices, and the iPad pretty much defined the product category. Macs may not have the same relative market dominance, but they are still a top-tier device.
But Marshall — an Apple bull with a $600 price target on the stock — suggests that Apple has failed to execute on this best-in-class strategy recently. “They used to do that in the past,” he said. “They’re not doing that today.”
Broadly speaking, it’s the same concern voiced by many other analysts, investors, and consumers. Just as the world was getting used to Apple’s insane pace of innovation, it seems to have ended.
The pipeline is not nearly as interesting now as it has been in the past, and as the stock’s price action over the past few months suggests, many investors are concerned that competitors like Samsung (SSNLF.PK) and Google (NASDAQ:GOOG) may be getting the better of the company.
To Marshall, this fear manifested itself as an attempt to actually jump ship and switch platforms.
“I wanted to make the transition, but I couldn’t do it at the end of the day,” he told CNBC’s “Squawk on the Street.”
The reason why he wanted to switch was because of the relatively small screen size of the iPhone. Marshall points out that most high-end phones now boast a 5-inch screen, and larger screen sizes seem to be increasing in popularity at other price points as well. As the analyst notes, among other benefits, a larger screen size is better for typing, which is arguably the most-used input function.
Marshall ultimately pinned the reason why he didn’t switch on the difficulty of migrating personal information like contacts and music, as well as an unwillingness to abandon an ecosystem he had become so familiar with.