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Apple Inc. TV Stabbed With “Barely Competent” Takedown

Apple stock

Apple Inc. video services aren’t working out, or at least the “baby steps” stage is resulting in a lot of unnecessary bruises. The undertaking is desperately trying to get its video platform off of the ground. So far those efforts have resulted in more losses than wins. The latest foray may have hurt more than most.

The firm’s highest profile show released so far, called “Planet of the Apps” has, illuminatingly, not been well received. Maureen Ryan, a critic from Varitey, described it as a “tepid, barely competent knock-off of ‘Shark Tank.'”

The “tepid, barely competent” comment could be used to describe a lot of the firm’s efforts around TV.

Apple hands-off TV approach falls flat

Apple Inc. TV efforts fall falt

According to rumors emerging from the sets of various shows, Cupertino isn’t really imposing its will on TV producers. The firm is taking an uncharacteristically disconnected approach from its own products. In a report on Tim Cook’s recent handling of content, Business Insider found a lot of skepticism among those close to production.

A couple of the shows worked on by the firm have been indefinitely delayed. “Vital Signs” a semi-autobiographical Dr. Dre vehicle is slated to start in August. Eddie Cue’s team have yet to confirm this, however. The same appears to be happening with Carpool Karaoke. That show’s launch has been canceled twice. Now it has an August release date, though it’s not clear if Apple Inc. is going to stick to it.

This all shows a level of surprising inexperience. Tim Cook is trying to fix that, however. Just recently he hired two Sony execs to help lead the TV push. They may be useful in upcoming negotiations.

Apple fails to talk with TV execs

Over the last two or three years the Wall Street target for Apple in the TV space has been the creation of a bundle of channels to replace cable TV. This idea has been circulating for a few years, but it’s never really come to anything.

Way back before the iPhone launched in 2015 it was widely rumored that Apple would announce a TV package. That fell apart just weeks before the event. In December of that year CBS President Les Mooves told the public, “They’ve had conversations on it and I think they pressed the hold button.” Collapsing deals like that aren’t odd, but the reasons behind them can be a source of a good deal of information.

According to the stories that floated around in the wake of that failure, Apple execs simply weren’t able to come to terms with those in charge of content. This isn’t necessarily the fault of one side or the other, though those in charge of TV companies were apparently put off by Apple’s negotiating style.

“In that area , Eddy negotiates like they need Apple. Not everybody is on board that they need Apple,” a source told Business Insider, referring to Eddie Cue, Apple VP of Internet Software and Services.

We can’t know what really killed the talks, nor if they’re dead for good. What we can do is add another indefinitely delayed project to a long list of Apple TV casualties.

Apple TV hardware is a long way off

Apple Inc. TV hardware

The Apple TV programming division emerged after years of hardware rumors. Many on Wall Street were obsessed with the idea of a full living room TV panel designed by Cupertino engineers. That never emerged despite millions of dollars worth of speculation. The story appears dead for now.

Back in the middle of 2015 Gene Munster, the biggest cheerleader for Cupertino’s living room hardware, had a revelation. His moment of truth came in the form of a Wall Street Journal article.

Mr. Munster’s note, written while he was an analyst at Piper Jaffray, read “We have been talking about an Apple television for the better part of the last decade. While it is a small consolation that the article affirms that Apple was actually working on a television during that period, in the end we were wrong in our constant expectation of the product.”

Instead the firm has put its efforts on its TV box, the Apple TV. That’s the device that carries the firm’s services into living rooms across the world. It works, it’s solid, but it’s not enough for Wall Street to fall in love with. Unless Apple Inc.   massively increases sales of the device it’s not going to be

TV doesn’t drive Apple stock

So far Apple Inc. has used its TV offerings to drive a little more value into Apple Music. That’s enough for the firm for now, though it’s certain to want to grow its services segment further in the coming years. At the end of the day, however, it’s the iPhone that really drives Apple stock.

Apple Inc (AAPL) iPhone 6s

Unless Tim Cook starts pushing out TV shows that actively alienate people, those efforts are marginal at best to the firm’s overall value. What really matters was summed up in a report from Maxim Group’s Nehal Chokshi on June 19.

Wall Street is betting that there is untapped demand for a new iPhone design in China, and across the rest of the world. This is what, if those stories are to be believed, will drive stock in the firm higher. Everything else is just a footnote on the firm’s earnings report.

In general Wall Street is pretty happy with the Cupertino outfit. Right now just two of the analysts polled by the Financial Times have a negative outlook on the stock. 35 more believe that it is currently worth buying, while 14 advise putting a Hold on the shares. The median twelve month price target sits at $161.50. That’s well above where Apple Inc. stock closed on Friday afternoon.

Services may be the future of Apple stock

Eddie Cue has a key role because services is one of the fastest growing segments at Apple Inc. . Some on Wall Street are even betting that it can be the future of the firm. That’s because of the grand growth possibilities, and the high margins.

So far, however, video hasn’t given the firm the lift it needs. The bumbling, almost incoherent meandering between different TV visions makes the effort difficult to bet on. It failed in hardware, it failed in TV bundling. Right now it looks like the firm is failing in content.

That said, to date the firm is only dipping a toe in the water. We won’t really know its capabilities until it does more in the space.

What those with Apple stock are doing, for the most part, is ignoring the services segment or treating it as a bonus.

Maureen Ryan’s of Variety’s critique of “Planet of the Apps” is once again resonant here. The services segment is, for now at least a bit too hollow and mechanical to pose much of a threat, or to hold the attention of anyone but the most tech-obsessed business majors.”

What most holding Apple Inc. stock care about is the iPhone. Perhaps in a couple of years services will come into their own, and by Season 3 or 4 “Planet of the Apps” may actually be worth watching.

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Adrian Smith

Adrian Smith is a finance and tech writer and currently working on a Masters in Business Information. He has developed a keen interest in all things finance and technology and loves to write about it.