Has Apple Lost Control of the Narrative? Yep

| The Back Page

Apple is getting ready to retake control of the narrative, according to Barclays analyst Ben Reitzes, and doing so could help the company's stock regain momentum. Mr. Reitzes raised his price target for $AAPL to US$525 from $465, sparking a rally. In the early afternoon session, the stock was trading at $460.928, up $10.948 (+2.43 percent), on moderate volume.

Story Telling

At the heart of Mr. Reitzes's research note is the idea that Apple lost control of the narrative, something I completely agree with. Starting with the release of the iPhone 5, iOS 6, and Apple Maps, the ousters of Scott Forestall and John Browett, and the lack of new product announcements since then, Apple has been in a cycle of news coverage focused not on what Apple will do next, but rather what Apple has done or is doing wrong.

This hasn't been the case for maybe the last ten years. Starting with the early days of the iPod, and then iTunes, and the Apple Store, the Apple news cycle was long dominated by a binary system of talking about what Apple just released or speculating on what Apple is about to release.

PullquoteApple upset the apple cart by refreshing the whole kit and caboodle of its product line in the fall, which unsurprisingly meant no spring media event. Into that vacuum swept pronouncements that Apple was doomed without the late Steve Jobs, speculation that Apple has lost its mojo, worries about the lack of a phablet, and wild and ignorant speculation that Apple's board was looking to replace Tim Cook as CEO.

How was Apple to deal with that? The truth is that Apple has no experience with fostering a news cycle. Apple's only track record is controlling the cycle—it's public relations culture is dedicated solely to that mission.

As I've often put it, most PR departments are just praying that the press will say something, anything about their company, while Apple is in the unique position of controlling access in order to manage what is said.

That works really well when everyone on the planet thinks you are the bee's knees, but what we've seen in the past six months is that this model has a weak point. When the press smelled blood, Apple's PR department wasn't there to fill the void and keep control of the narrative.

On top of that, the press has every reason to enjoy a huge rush of schadenfreude at Apple's expense. The company is notorious in press circles for being difficult to work with, and aside from a few high-profile folks, getting gold out of Fort Knox is easier than getting a straight answer out of Apple.

When the press went digging for negative Apple news around the planet, it found it, and Apple's PR department wasn't set up to mitigate that bad news with contrary information. Apple is all about secrecy, a policy that has served it well since the return of Steve Jobs in 1997, but secrecy has clearly and explicitly not helped Apple control the news cycle in the last few months.

Allow me to hammer this point home: while secrecy has been an amazing tool in Apple's arsenal, the tsunami of negative coverage we've seen aimed at Apple for the last six months—much of which has been factually wrong, completely illogical, and even stupid—is just as much a product of that secrecy as the positive press the company enjoyed for so many years.

Nothing lasts forever, of course, and even this negative news cycle aimed at Apple will come to end. Apple will regain control of its news cycle later this year when it releases new products, and in the meanwhile Apple's PR department has been adapting to the company's change in perception.

This is what Mr. Reitzes sees coming, and I couldn't agree more. "We believe Apple is about to change the narrative and get investors, analysts, customers and the media finally talking about new products again – starting with a software/services/Mac event on June 10th and a likely iPhone/iPad event in September."

$AAPL has been on a tear since April 19th, when it hit a low of $390. The stock is up 18.2 percent since then. It remains to be seen if Apple can regain control of the narrative and continue that stock trend, but betting against the company has generally speaking been a losing proposition.

Image courtesy of Shutterstock.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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Comments

geoduck

+1

MacMike

+1 +1

Well said Bryan.

CudaBoy

Apple’s shortcomings are why the stock got hit. And, if you think this stock price will hold - uuhhh no. Check my record - just call me knows-some-damus.

WMac

Interesting analysis. In the short term, the stock gets hammered, but in the long run, Apple’s strategy has and will continue to serve them well. The stock market, by the way, what real value does it add? As a former stockbroker,  I think way too much emphasis is placed on “what happened on Wall Street today” than what is the state of our economy?
It is real clear to me that the “experts” don’t get the Apple vision, or think that because Steve (my birthday buddy) Jobs is gone that Apple is going to fail. People who believe this are going to be sadly mistaken…

geoduck

WMac
As a former stockbroker your insight is interesting. I (not a stockbroker nor had anything to do with casual investing) happen to agree with you. The news concentrates on the daily machinations and not the overall health of companies, or the countries economy. They’re watching the ripples on the shore and not what the tide is doing. If they had been I suspect we might not have had the crash of ‘08, or ‘01, or ‘87, or…

Nathan Hillery

Weren’t you around for the other share-price collapses? Those that had has much (i.e. nothing) to do with Apple’s core business health? While it may look like nothing’s going on on the outside, I assure you Apple is advancing on the inside and is still far ahead of the competition. We just have to wait for the announcement and watch everyone else scramble to understand what just happened to the market (consumer market, not willy-nilly Wall Street).

CudaBoy

Good point Nate. To me there is more than one thing we’re talking about. Whether Apple ever had anything to do with controlling a narrative is suspect to me. Products and perceptions seem to drive that stock market thing, but ONLY perceptions and real experiences will get consumers to be customers. 
The stock is stupid high based on Apple training the consumers that don’t care about stock prices at all that a new cooler thing is coming soon. And it did for a while until the idea well dried up but the price point was still high.  Problem is that the base can change and perception can change. I know a lot of people think Apple was cool with iPod, iPhone but are playing CATCH UP to the competition ever since and, with a lack of ANY “new” stuff coming out the competition can move ever further (Samsung’s TV’s, Google’s glasses) in front of Apples “old” stuff. I think the narrative Apple generates to the customers will trump the narrative they have to fake to the investors. Make the customers happy = sales = happy shareholders. But, truly Apple could always keep the investors happy by slowly following the competition as they did with a small tab and will likely do with the big tab and the phone if and when they feel they need to impress the shareholders. Me? I miss the magic. I beg for a Mac Pro that is just outrageous in power and technology - and I want it while this site still contains the word “Mac” in it. I know - how irrelevant am I?? Computers? Pshaw.

John Dingler, artist

My comments don’t appear immediately, like this time, so I will repost:

“Hi Bryan,
Yeah, Cook’s refreshing so many things (I believe everything but the MacPro) at one time seemed weird, an anomaly, as if he wanted to show his macho prowess, an experiment to examine if doing this were even possible, to showcase his core strength of supply distributin management, or to establish his leadership bona fides among his, well, peers, really, as well as to demonstrate that he was NOT like Steve Jobs who trickled out stuff but WAS like Jobs in the area of innovation, in this case innovation in the management of mass product refresh.

So, with Apple’s deep and broad reach in tech media, and especially to Apple news media, the long period of dead time between mass refreshes introduces a significant amount of pedestrian tediousness even to Macsufer.com and MacObserver.com and, as you say, attracts negative press into the vacuous space.”

wab95

Bryan:

I wanted to comment on this yesterday, but time was not on my side.

Briefly, your point (and that of Ben Reitzes) is an important one. Apple have lost control of their narrative, and need to regain it. It is important, however, to appreciate that Apple controlling their narrative is, historically, not about strategic deployment of a PR strike force who then dominate the airwaves, so to speak, but through a pre-product release controlled silence that a submariner might envy followed by product and service rollouts that confound, dazzle and amaze critic and client alike. In one recent Twitter exchange with Mark Fuccio, he too commented, ‘...their (Apple’s) culture is to do and show, not talk’. This is exactly right. It’s now also been shown to be an exploitable chink in their fortifications, perhaps even an Achilles heel.

Apple’s narrative is action and outcome based, and its exposition is the user experience that, as a whole system, is unrivalled in eloquence and argument. The so-called ‘hype’ of which many a critic has complained comes not from Apple (unless one wishes to criticise Apple’s showcasing of its products in fora such as WWDC), but from the wider community of the media, analysts, pundits, bloggers, fans and foes - in a word - us. If one sees the purveyance of hype of as a bad thing, and its purveyor as an enemy, then, to quote that American icon, Pogo, ‘We has seen the enemy, and they is us’.

From my observation, at any rate, Apple’s PR department’s task has been primarily confined to damage control and putting out brush fires around problems associated with those releases; efforts at times complicated by competing comments from an irascible immediate past CEO, who shall not be named.

I would argue that, just as a number of changes are increasingly apparent in the communication style that Apple are showing under Tim Cook, another that should change as part of a necessary cultural evolution, in my view, is Apple learning to proactively and strategically message. By this is intended, not pre-rollout press releases on upcoming products, or even pre-emptive apologies on missing features, but on managing expectations. I see glimpses of this in Cook Code, but it takes a bit of deciphering and a willingness to pause, reflect, and think. These are skills with which not all analysts, pundits and investors are endowed.

However, carefully worded comments about the current state of technology, and where Apple see this fitting in, if at all, to emerging consumer products (without specifying their own), can be skilfully broached without either commenting on rivals’ products or tipping Apple’s own hand; distinct from but not unlike what SJ did regarding Flash and what Apple did pre-OS 10.7 release with selected Apple analysts. These are examples of what can be done, not as a new mode of communication, but supplementary clarification and context, itself only part of a broader communication strategy in which the undulation of silence and action remain the primary discourse.

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