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.
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.
Apple 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.