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Can Apple Get Back to Highs?

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    Forbes Magazine Editor Richard Karlgaard on the future of Apple.

  • Duration 4:58
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It's failing badly to hold that 500 dollar Priceline -- the stock plunging another 3%.

To close at 485.

Dollars a shared yesterday came the news that iPhone 5 sales are slowing.

So much that they're cutting some of their part orders and half.

And today competitors Samsung announcing it sold 100 million galaxy S models.

So is there any way apple can actually get its -- -- back as the stock and as they stand out leader in design and innovation rich car guard.

-- -- magazine he's been following high tech world from his Silicon Valley perch for decades and he joins us now rich.

Great to see you thanks for coming -- can apple ever recover and if so how.

Well it would be a little bit hard to get Steve Jobs back into living so they've got that going against them he was the one who rehabilitated the company when it was on the the floor that introduced sell these new great products including iPhone in 2007.

Look -- you know the iPhone did not have much competition for the first few years.

After is introduced first android phones from Google.

We're not that good but now the android Samsung combination.

Is very powerful and apple you know just as proof.

And how fast that things can happen is just how fast that iPhone 5 sales of slow down.

-- this that your kind of a business' story this is an epic business story books are gonna be written about how.

Apple lost this extraordinary.

Lead that they had which just a few months ago people were saying they were gonna lose for years if ever.

How what's the lesson here what did they do wrong was it was it a case of hubris.

Think it that they could do no wrong or what.

Well that's a great question David you know I'm I think that that Steve Jobs says something very valuable and -- 1990s.

Interview.

When he was out of apple.

And he told the apple executives not to be greedy not to live on high margin products because it wouldn't collapsed.

And you could just substitute the word iPhone for Macintosh.

And the same thing would be true today I think that apple thought that it could live in a world -- could dictate prices to suppliers.

Where it would get this 400 dollar subsidy per phone from the carriers like AT&T and Verizon.

And that it would have these high margins forever but margins don't -- so I think the mistake apple made I think it's trying to correct itself.

-- to lower the price of the iPhone and and really propagate the iPhone throughout the world but it's also new products and innovative product data modeling innovative products but -- design models that are different I mean it.

Is that is that -- lost for good.

You know will see yet a lot of savvy observers and I wish I could have claimed that I was one of them.

So that apple would probably do very well for about a year after Steve Jobs is death well.

Steve died in October 2012.

And it was just about one year.

And they have that momentum and you really have to ask.

Where is the creativity of the genius is Steve Jobs -- eazy.

Within apple so one camp would say this one camp would say that and he would say this is the way it's going to be his instinct his gut were always right on the mark.

They do have so much talent left our first -- all they have a lot of cash to they have over -- hundred.

Hundred billion dollars and -- huge amount of cash if they have a huge amount of talent that they have can't they put that together.

To come out with some new innovative thing that'll that'll take the market by storm.

What.

Here's -- you know here's the fundamental issue David Tim Cook who is the CEO of apple may be the world's best.

Big company operations guy he was the chief operating officer under Steve Jobs.

Now he's the CEO.

I think for all of those virtues and they are many that thing that he doesn't really have.

Is that confidence to -- it you know -- bet big on this product or that product so I think there's just a lot of conflict in paralysis going on inside of apple right now.

OK and finally besides being a business stories -- a huge stock story as well let's move markets.

What this stock has done there's this big battle between Nomura and and -- -- guy I guess you saw about your belly thinking that is -- At current levels rumours saying it is not a -- at all it's gonna go down further.

Do you dump the stock now or do you buy in at these levels what would you say.

But I'd say you sit on your hands right now because I think I -- in the near 30% drop since September is quite a -- and in -- would tempt you to get back again.

But I don't see the product pipeline the probable is.

Is that apple is such a low PE valued company right now that to continue to sell it might be a mistake to so I would.

I would I I would -- quickly say it's a neutral right now.

Facts are right.

Rich -- very intrusive story I mean again books will be written about what happened apple how it lost its lead rich -- -- publisher of Forbes magazine thanks very much -- over to you.

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