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Who’s paying Brett Arends to malign Apple?

Arends

Daniel Eran Dilger

Brett Arends, the notorious shill who filed discredited attacks on the iPhone launch in Jim Cramer’s the Street listing “Five reasons not to buy an iPhone” and attacking the new phone at its launch for supposedly costing buyers “$17,670,” is now printing his fully unsubstantiated opinions on Apple in the Wall Street Journal.

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“Apple is now valued at $1345billion,” Arends claims in his “ROI” blog published by the Wall Street Journal. Well, that’s off by a factor of ten, but I’ll assume Arends just made a typo on accident. Arends says Apple’s shrinking low end iPod sales, more than accounted for by new iPhone growth, are a cause for worry, as are its 8% lower revenues from 4% greater sales of Macs, year over year. Perhaps he should look at the PC industry in general, which is shrinking in both units and revenue. Mr Arends, welcome to the global recession.

Arends also complains “Apple stock is now a mobile phone stock. And that’s a brutal business.” Yes, brutal for pretty much everyone outside of Apple and RIM, who both take away nearly 20% of the industry’s profits while only selling a few percentage points of its unit shipments. “Even if the iPhone defeats all takers,” Arends then posits, “what will happen to profit margins?” Seriously, that’s the best you can offer us Mr. Arends?

Despite Earnings, Apple Is No Investment Opportunity – WSJ.com

Arends got the iPhone wrong, too.

Almost two years ago, Arends wrote, “let’s get one thing clear. The iPhone isn’t the future. It isn’t a revolutionary mobile device ushering in a new era.” That comment is now in the same league as Palm CEO Ed Colligan’s reaction to Apple’s iPhone, which predicted that “PC guys are not going to just figure this out. They’re not going to just walk in.”

Among Arends’ stated reasons for viciously attacking the iPhone, sight unseen at its launch, was its initial lack of third party software. Today, the iPhone’s App Store and its catalog of 65,000 mobile titles is exactly what everyone else in the mobile industry desperately wants to have and yet can’t approach even after a year of concerted efforts at trying to catch up with iPhone 2.0.

Arends also complained about an inability to play over the air music downloads and podcasts. At the time, the iPhone could already download podcasts and other media on the web, indicating Arends’ severely limited understanding of the status quo; today, the iPhone offers paid iTunes downloads with no extra network feeds for mobile store access (common on competing phones), further illuminating Arends’ failure to anticipate where the puck was headed.

Back then, Arends was cheerleading for Verizon Wireless’ Microsoft DRM-based V Cast service, which cost users $15 per month and then charged $2 for songs, $3-4 per video, and $4-5 per month to rent games (all of which were locked to the phone). The iPhone’s iTunes store charges users no monthly fees, and songs, media, and software are all far cheaper to boot.

 Wp-Content Uploads 2007 10 Rd-Rdm.Tech.Q3.07-0Dd7145D-2017-4Da7-9799-091Cedff0Cee-Files-Thestreet

The Street’s Flaccid Campaign Against the iPhone

Paid to be wrong.

Of course, Arends wasn’t out to get the iPhone just because he had a sketchy understanding of the new device and no capacity for visualizing the future. He was simply disgorging propaganda fed to him by Verizon troll Roger Entner of “IAG Research,” a group that represents the interests of Microsoft of mobile phone companies, which are all listed on the ‘research’ group’s clients page.

So who paid Arends to “counter” Apple’s blockbuster earnings report by writing for the Wall Street Journal that Apple is a bad stock pick because, he says, there’s no way the company can possibly continue to grow? Arends doesn’t say. He also doesn’t ever say why he thinks there’s limited potential for Apple to continue its trajectory of success, an opinion that flies in the face of the general Wall Street consensus to buy Apple.

Surely the fact that Apple currently has less than 10% of the global PC industry and a similar share of the rapidly growing market for smartphones portends some potential for growth. Microsoft and Nokia, the current vendors who dominate those markets, are both losing share as they make major blunders. Both already bring in much less money relative to their market share than Apple does.

The bigger question is: why a newspaper with some remaining legitimacy is hiring a blowhard idiot like Arends to prattle on about Apple with less factual support than the typical PC-centric columnists who appear in the free industry rags?

28 comments

1 davebarnes { 07.21.09 at 10:51 pm }

Glad to see you back. I missed you.
Trenchant as always.

2 Dorotea { 07.21.09 at 11:33 pm }

Agreed. Daniel’s work here at Roughly Drafted is sorely missed.

3 Who’s paying Brett Arends to malign Apple? « Day and Age { 07.21.09 at 11:33 pm }

[...] Daniel Eran Dilger: The bigger question is: why a newspaper with some remaining legitimacy [The Wall Street Journal] is hiring a blowhard idiot like Arends to prattle on about Apple with less factual support than the typical PC-centric columnists who appear in the free industry rags? [...]

4 daGUY { 07.22.09 at 12:03 am }

Wow, is this some kind of joke? Apple is doing amazingly well compared to the rest of the PC industry, and *especially* considering the recession.

For example, Arends writes:

“The company sold just 4% more Macs than it did in the same period last year, and this time at a lower price point.”

He makes that sound like a negative. I think the fact that Apple managed to sell MORE Macs at all is extremely impressive, especially considering they only have one model that’s less than $1,000 (Mac mini). Meanwhile, the only signs of growth in the rest of PC industry are bargain-bin-priced netbooks, which are generating basically zero profit.

Also, yeah, iPod sales went down, but that’s because iPods have pretty much saturated the market. I think the 600+% growth (!) in iPhone sales more than makes up for the 7% decline in iPod sales…

True, Apple’s growth can’t continue forever, and the recession will probably catch up with them eventually if it gets any worse. But I think given the current economic climate, they’re doing quite well. I wouldn’t worry yet…

5 davesmall { 07.22.09 at 12:10 am }

Could not agree more regarding Aends. What a complete moron.

6 bartfat { 07.22.09 at 2:00 am }

@daGuy

well, actually the Macbook White is 899 if you have an educational discount.. but yeah, I’m REALLY surprised that this comes up in the Wall Street Journal. Usually they’re not that bad, and actually pretty informative at times in other areas. Someone must’ve really gotten mad at the success of Apple and the resulting stock price uptick. But then again, the Wall Street Journal is known to be have some extremely conservative readers that may be invested in some other manufacturers and want to hear something else than Apple succeeding when their own stock price is falling..

7 Per { 07.22.09 at 2:36 am }

Great to see some RDM stuff again :-)

8 John E { 07.22.09 at 2:40 am }

arends and cramer and the rest of the Street gang are just blatant fakers trying to run their pathetic stock manipulation games. really the worst of the worst. Jon Stewart did a great job on cramer, but he stopped short of calling him an outright fraud. should have.

now that Murdoch owns it, the WSJ will inevitably degenerate into a total whorehouse. so actually, Dan, arends fits right in.

from his piece today: “The wondrous thing about the iPhone is not how Apple did it, it’s why Nokia or SonyEriccson or Palm didn’t do it years earlier.” ah, sophistry at its finest. what an incredible human being.

9 weave { 07.22.09 at 7:36 am }

Oh my, iPod sales are down? Er, maybe that’s because all those millions of people buying an iPhone don’t need to also buy a new iPod BECAUSE THE IPOD IS PART OF THE IPHONE.

Gessh.

10 Web Media Daily – July 22, 2009 { 07.22.09 at 9:09 am }

[...] Who’s paying Brett Arends to malign Apple?…   Roughly Drafted Magazine [...]

11 daGUY { 07.22.09 at 9:34 am }

One other thing:

“And then there is the issue of Steve Jobs’ health. This remains a major worry. He was notably absent from the company’s conference call.”

Doesn’t Jobs not even usually show up on these calls anyway? If he wasn’t there, it obviously didn’t have anything to do with his health, since he’s back at work.

I mean, really…Jobs already left, recovered, and came back to work, and the company did completely fine in the interim. Yet people like Arends are STILL jumping to conclusions, like assuming his absence from a conference call (that he doesn’t even normally attend!) is somehow tied to his health and therefore cause for alarm.

If anything, Apple probably wants to minimize his public appearances precisely because of people like Arends who put WAY too much stock in him alone and not the overall company.

12 TimboM { 07.22.09 at 9:46 am }

Two things.

First, an Apple bashing headline is click whoring at its finest, because you will get both sides of the nearly Jihadist Mac vs. Windows debate. It’s journalistic vaudeville.

Second, any wonder why thestreet.com has Apple-bashing, when most of the time the side ad that loads is for Verizon and/or Blackberry? Duh. It really doesn’t pass for journalism. Or stock picking, either. Cramer says ‘I’m not a buyer of Apple’ when it’s at $100, then recommends it at $152. Weird.

13 VeoSotano { 07.22.09 at 11:31 am }

Nice to read from you, Dan. Btw, you’ve got a typo there… It should read “fees” not “feeds”, where you talk about music downloads ;)

14 Tardis { 07.22.09 at 12:58 pm }

Brett Arends is a snake-tongued market manipulator whose comments cannot be trusted, in the school of Jim Cramer and others with shady connections.

These people make their money from purveying tittle-tattle to influence either buys or sells. If they can make people believe that lower iPod sales mean they should sell Apple stock, they will be making money from people who will sell that Apple stock that they will then buy.

These are the same people that brought down Bear Stearns, they brought down Lehman Brothers. The only reason that they cannot bring down Apple is that they cannot spread enough rumours and bring enough “short sell” cash to the table to make it work.

Remember what Steve Jobs said the last time he was asked about this?

15 g4dualie { 07.22.09 at 1:17 pm }

Murdoch is the liberal elite and he surrounds himself with people who aren’t afraid to make the news. He couldn’t be bothered with trivial matters like Apple politics but if it’s any consolation to ya’, Murdoch signs all of Arends’s paychecks.

Your piece reads rushed, but appreciated nevertheless. (Ever feel like a one-legged chinaman in an ass kicking contest?)

[When you say "Murdoch is the liberal elite" are you aware that he's actually the low brow Austro-fascist republican behind the Fox network of rabid white-christian terrorism mongers? Kind of the opposite of liberal or elite. - Dan ]

16 KenC { 07.22.09 at 1:27 pm }

You only need to read the blog at deepcapture.com to find out all the shenanigans behind Jim Cramer’s TheStreet and its hacks.

17 alansky { 07.22.09 at 3:17 pm }

You know the old story about a million monkeys with typewriters? What they actually create is not the works of Shakespeare but the avalanche of shamelessly inept “expert analysis” that appears on the internet each and every day. It’s a pitiful situation when respected sources like the New York Times and Wall Street Journal start publishing the opinions of clueless hacks. Scary, actually.

18 Maniac { 07.22.09 at 5:03 pm }

Wall Street gives negative value-add. In general, they’re myopic parasites, mindlessly focusing on short-term quarterly profits instead of long-term technology development.

I suspect Mr. Arends might be shorting Apple stock. And/or he’s on beleaguered Microsoft’s payroll, and he’s using the “best defense is a good offense” strategy to divert attention from the great Vista failure.

19 got nate? { 07.22.09 at 6:42 pm }

@bartfat I would like to remind you that Wallstreet Journal is now owned by Rupert “FauxNewsCorp” Murdock. Anything even remotely related to murdock must be taken with a piece of salt the size of your head.

20 cy_starkman { 07.22.09 at 7:17 pm }

Apple also said last year that they would have lower margins over the next 12 due to investments in production process.

Thanks for writing Daniel, your insights and outrage are always appreciated

21 davesmall { 07.22.09 at 7:44 pm }

I think Breyt Arends is really Michael Moore. Nobody else could be that stupid.

22 g4dualie { 07.22.09 at 8:50 pm }

Perhaps Dan, but when I see how he LIBERALLY distorts the facts, makes up news, and uses the synergy of his media empire to advance the agendas of his elite group of old cronies, to me he is a liberal elite.

23 hylas { 07.22.09 at 11:31 pm }

John E’s quote:
“(N)ow that Murdoch owns it, the WSJ will inevitably degenerate into a total whorehouse.”

Teaches me to drink while reading – made milk come out my nose.
Then I laughed the laugh of a hundred years (Hearst), very funny – very true, and what?!, it only took a couple-a years.
You KNOW he’s looking the NYT up and down like a felt capped crooner makin’ his move to uptown.

http://en.wikipedia.org/wiki/William_Randolph_Hearst#Yellow_journalism

The “common sense” crowd is making strides, relief is just over the hill.

” … into a *total* whorehouse.” – priceless.

24 John E { 07.23.09 at 12:03 am }

yeah, Hearst, good point. without whom the Spanish/American War probably would not have happened (McKinley was torn, but caved in to the media hysteria of “Remember the Maine!” which actually exploded due to its captain’s incompetence). the birth of American imperialism (incl. the bloody conquest of the Philippine “rebels” and century-long Central American hegemony). yeah Murdoch and his Fox News neocon gang would no doubt love to replicate that hegemony in the Middle East. conquering North Korea tho might prove a little too tough for these chickenhawks.

25 Apple Profits, But Stock Is Not A Buy – WSJ.com « David Chin Online { 07.23.09 at 12:58 am }

[...] Roughly Drafted Magazine’s opposing view.   [...]

26 The Mad Hatter { 07.25.09 at 1:36 am }

John E { 07.22.09 at 2:40 am }
now that Murdoch owns it, the WSJ will inevitably degenerate into a total whorehouse. so actually, Dan, arends fits right in.

A least a whorehouse is something useful.

Anyway, Brent Arends article is nothing surprising. The Microsoft shills are trying to draw attention away from Microsoft’s annual report, which showed significant drops in revenue and profit. Tomorrow I’m going to rip apart Microsoft’s SEC report, and see what it really says, there’s important parts of the filing that the news sites didn’t report on.

27 ounkeo { 08.17.09 at 11:32 am }

I’m sorry I read that article and I don’t see how anyone could see that he was maligning Apple.

He’s saying it’s unclear how it’ll turn out due to a few valid reasons. Apple entered a mobile phones market that is cut throat and provides thin margins. The reason Apple is raking in money at this time is mainly due to an installed base and a backward carrier/device maker coop that’s generally not the norm (because it’s backwards rather than forward moving). Once Apple has to fight it out with Nokia/RIM/LG/Samsung in the open environment and away from its installed base, it’s completely fair to say that this is a very unclear outcome, especially since Apple has essentially started moving into the “eggs in one basket” territory; It’s dangerous.

You can’t just put it on faith that Apple is *always* going to buck the trend. There are very real danger points and known variables out there (which apple has no experience in) that have to be considered for investors; and this applies to any company and/or investment.

28 Ryan Tate and Brent Arends desperately try to vilify Steve Jobs — RoughlyDrafted Magazine { 05.19.10 at 2:30 am }

[...] Profits, But Stock Is Not A Buy – WSJ.com Who’s paying Brett Arends to malign Apple? More on Scott Moritz and the Jim Cramer Street Misinformation [...]

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