Why Can't Apple Be More Like Taco Bell?

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Apple (NASDAQ: AAPL  ) shares are finally starting to heat up, but it's Yum! Brands' (NYSE: YUM  ) Taco Bell that's getting Fiery.

Fiery Doritos Locos Tacos -- the latest installment in the wildly successful line of crunchy tacos served on Doritos-flavored shells -- hits the market on Thursday.

Taco Bell knows what it's doing. Comps at its domestic eateries soared 8% last year, and a major contributor was the Doritos Locos Tacos that were introduced in March. The original Nacho Cheese Doritos-flavored shells were a smash hit, so Taco Bell followed that up with Cool Ranch earlier this year. The spicier Fiery offering is now just days away from joining the growing product line.

Taco Bell has sold 600 million Doritos Locos Tacos since last year's rollout. 

Now, Apple fans may very well be fuming right now. How dare I compare Apple to the haven of cheap and convenient fast food? If anything, Apple is Chipotle Mexican Grill. Its products are worth a little more, but there's a cult following where folks don't mind waiting in long lines for what they want. 

Yes, I get that, but let's talk about innovation.

When Yum! Brands saw that it had a monster hit with the Nacho Cheese Doritos Locos Tacos, it didn't rest on its laurels. It hit the accelerator. It spun the flavor wheel. It reacted!

Apple has been methodically slow. That may have worked with the first iPhone in 2007 or the first iPad in 2010, but the annual updates with only marginally incremental enhancements no longer fly in this market. Everyone else seems to be moving faster, and that means that Apple's market share in both smartphones and tablets is shrinking.

Where's the Cool Ranch iPhone? Where's the Fiery iPad? 

Chipotle sticks to its basic menu because it can. Comps are growing. The concept is expanding. A carnitas burrito or a barbacoa rice bowl is more popular now than ever. We can't say the same thing about Apple's iPad, where its share of the market -- measured by industry tracker IDC in terms of worldwide shipments this past quarter -- has eroded form 60% to 32% over the past year. 

Apple promised that new products would be coming later this year, and reports point to a media event to unveil the next iPhone next month. If the iPhone 5 wasn't enough to eat into Android's dominant market share last year, there probably isn't a good reason to get excited about the prospects of the industry-defining smartphone's next entry.

Apple doesn't need to look hard to find tech companies that falsely assumed they would be on top forever following what worked in the past. There are too many companies that naively figured that they would always be worth a market premium, and Apple probably doesn't even realize the damage that it's doing to its reputation by continuing to market older iPhones and iPads to achieve lower price points.

Apple needs to not only innovate, but it needs to innovate faster.

Why can't Apple be more like Taco Bell? The chain took a year between the first and second Doritos Locos Tacos introductions, but it wasn't afraid to hit the market a few months later with the third incarnation. How cool would it be if Apple offered iPhone and iPad updates every few months? 

The argument here is that the debuts wouldn't be the events that they are now -- or that the enhancements would be minor -- but let's pull up a stock chart. As well as Apple has fared in recent weeks, the stock is still trading nearly 30% below its peak from September of last year. That all-time high, by the way, happened the morning the iPhone 5 hit the market. 

If Apple could pick up the pace of introductions, it would give it more time to respond to Android enhancements and market conditions. One can argue that the headier pace of rollouts will also encourage Apple to raise the bar at a quicker pace. If it wasn't for Apple's pace of annual refreshes, we would have probably had the cheaper iPhone that we may get next month and the larger iPhone that we probably won't get next month by now.

Apple needs more flavor, and the market's getting hungry. 

Apple is getting crunchy
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Read/Post Comments (23) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 17, 2013, at 8:05 PM, josh995 wrote:

    LMAO!! Comparing Apple and Taco Bell. I think maybe we're writing articles now just for the sake of writing articles... no matter the silliness of the content.

  • Report this Comment On August 17, 2013, at 8:07 PM, Henry3Dogg wrote:

    MF hits a new low for absurd drivel.

  • Report this Comment On August 17, 2013, at 8:16 PM, rlcato wrote:

    Jumping the shark is fun!

  • Report this Comment On August 17, 2013, at 8:18 PM, brethan wrote:

    Well, we can compare Warren Buffet and Kim Kardashian. Both make money, but Kim Kardashian is much more innovative. I mean just last year she got pregnant to get millions, while Buffet's porfolio didn't do so well.

  • Report this Comment On August 17, 2013, at 9:08 PM, GrumpyOldHepcat wrote:

    Computer chips, tortilla chips. Same thing, really.

  • Report this Comment On August 17, 2013, at 9:23 PM, HiramWalker wrote:

    I'm glad you're not making computers for me. Come to think of it, I'm glad your not running a restaurant where I eat, either!

  • Report this Comment On August 17, 2013, at 9:26 PM, Cuftbll wrote:

    I don't know but it takes a hell of a lot of innovation to make a phone as powerful, light, and thin as the iPhone. There is a reason nobody else can do it. What does the competition do? They make phones bigger so they can hide their flaws. 5-6 inch screens. Hahahaha! That's not innovation. Stop a video when you look away? Hahahaha. Gimmick. Google glass? C'mon! Apple's competitors are wandering around trying to figure what to do and mean while Apple is sitting back laughing and waiting to change the world...again! Wait! But Samsung is coming out with a watch! If it looks anything like a watch see pebble and Sony it will be a failure!!! Apples device will have two things in common with a will tell time and it will be worn on the body. That's it! Btw...if Samsung customers buy cheap phones and don't like to pay for apps who the hell are they going to sell these watches too? Surely not IOS users with a 94% retention rate.

    And one more thing, my family for years has been crunching Doritos on our tacos or making walking tacos using small bags of Doritos. In reality, taco bell didnt do anything that we all haven't done thousands of times with Doritos and tacos. You think fritos came up with the idea of chili cheese fritos. No! Everyone was doing frito pies and dipping fritos in chili. Not innovation but capitalism!!!!

  • Report this Comment On August 17, 2013, at 9:38 PM, DrKND wrote:

    OMG, there's just no depth you won't plumb in your relentless and moronically insistent abuse of Apple. I'd tell you what I really think, but I'm sure that if I showed the FOOL the disrespect the FOOL shows Apple, I'd be tossed. As you should be. Pathetic.

  • Report this Comment On August 17, 2013, at 9:45 PM, mdl00 wrote:

    Brought to you by Taco Bell and Samdung.

  • Report this Comment On August 18, 2013, at 8:46 AM, Razor459 wrote:

    Sooooo, providing a third flavor of Doritos Taco is, in your mind, innovation? Holy crap! Back away from the keyboard. We will leave you the mouse so you can still play Farmville but no more writing for you

  • Report this Comment On August 18, 2013, at 10:52 AM, stefnagel wrote:

    Why Can't Apple Be More Like ... Motley Ghoul?

  • Report this Comment On August 18, 2013, at 1:15 PM, ViewRoyal wrote:

    "Apple has been methodically slow."

    The misplaced idea that Apple hasn't innovated since the first iPhone was introduced is as bizarre as it is fallacious.

    People who make irrational comments like this are displaying how jaded they have become, and also that they have short term memories and short attention spans.

    Take a moment to compare the first iPhone in 2007 with the iPhone 5 introduced just 5 years later in 2012. There is a world of difference between the two... not just in looks, but in both hardware and software features and technologies! A person would have to be cognitively dysfunctional to not see any differences or advancements.

    And some people have the misguided impression that Apple's rate of introducing ground-breaking new products has come to an end. That opinion has absolutely nothing to do with reality.

    Apple has NEVER introduced new paradigm shifting products every year. If you calculate the average time between major product introductions (the first Mac, the iMac, the iPod, the iPhone, the iPad), it works out to about 7 years on average! The iPad was only introduced 3 years ago, so allow at least 4 more years before complaining that Apple isn't innovating fast enough for you.

    And if you have the irrational misperception that Apple is not innovating any more, you need to go through Apple's web site to introduce yourself to all of Apple's recently introduced and upcoming hardware and software innovations.

    There is no other tech company (not Google, not Samsung, not Microsoft) that has the quantity and quality of real innovative products that Apple has currently and historically. There have been other companies who have introduced concepts like self-driving cars, a multi-touch coffee table, or computers you wear on your face... but none of these concepts have become game-changing products that we now see everyone using worldwide as we do with Apple's products, and competitors' versions of those products.

  • Report this Comment On August 18, 2013, at 2:48 PM, johnhenr wrote:

    Wow! Touched a nerve with all the Apple geeks. Sorry guys but have never owned an Apple product and never will. Love my Android phone and my Microsoft Surface tablet. Frankly, you can keep your overpriced Apple toys - and by the way, wen Steve Jobs died, so did Apple's innovation. Good luck suckers.

  • Report this Comment On August 18, 2013, at 9:19 PM, tfmeehan wrote:

    Hey, johnhenr, you open your post acknowledging that you know nothing about what you're about to comment on, then proceed to solidify that brilliant position.

    Haven't heard the "toys" thing in years. Ever since PC users decided their strongest owner argument was as gaming machines. Kinda took the sting out of it.

    And the fact that you love your "phone that doesn't make any profit" and your "tablet that no one is buying" is not exactly a convincing argument but this're the epitome of the phrase "ignorance is bliss."

  • Report this Comment On August 19, 2013, at 7:45 AM, tfmeehan wrote:

    At some point (lets hope it's soon) but Rick and other market analysts are going to have to realize that Apple is not playing the game according to the accepted rules. When you're taking the lion's share of profits you can afford to not care about marketshare. We've been hearing for years about how the marketshare leaders would start reaping the benefits any day now. Apparently "any day" is still some unknown time in the future.

    Apple, who BTW has NEVER been the marketshare leader, continues you to be the overwhelming profitshare leader. They also have the most developers and more apps still appear for iOS first. The reason for this is one ignored by conventional wisdom and analysts...users of the marketshare leader don't spend money on apps and don't access the internet. iOS users crush them in both activities.

    As to innovation standards, here's a handy chart...

    Apple Innovation= reinvention of a market.

    "All others" Innovation= bigger screen.

    I suppose it's Apple's own fault for raising THEIR bar so high (and, so far, WAY out of reach of anyone else) that they set themselves up for misguided attacks by pundits.

    Apple is far from perfect but the day they start to listen to the clueless just to make their stock go up is the day the predictions of doom will actually have some validity.

  • Report this Comment On August 21, 2013, at 5:58 PM, enltgen wrote:

    I LOVE the fact that Apple consumers are so loyal they are almost BLIND. If you don't like the MF references, that's one thing, choose to ignore the signs? Fine, it's your choice but don't hate them for offering a opinion... I love Apple for some things it did and does but I also love my Android products as well for different reasons.They can learn from each other and both succeed in making investors a return on their investments.

  • Report this Comment On August 21, 2013, at 6:03 PM, mikecart1 wrote:

    Why is Apple being compared to Taco Bell when Taco Bell is not only in another entire industry but is just a portion of its parent company Yum! Brands? This has nothing to do with being a fanboy of Apple or Taco Bell. They just aren't not apples and oranges in comparison. They are more like apples to cooking utensils.

    So confuse.

  • Report this Comment On August 21, 2013, at 6:25 PM, cmalek wrote:

    Yes. Why can't Apple be more like Taco Bell, or YUM, and be underperforming the S&P 500 for the last 9-10 months?

  • Report this Comment On August 22, 2013, at 4:18 AM, Libertarian71 wrote:

    I bet if Apple made tacos, they'd at least taste good.

  • Report this Comment On August 22, 2013, at 7:23 AM, Wjarvis98 wrote:

    I love most of my Apple products. My wife must love her android products because she keeps getting new ones - typically warranty replacements but sometimes she gets a new model because Verizon can't replace her current unit.

  • Report this Comment On August 22, 2013, at 12:10 PM, LeisureLadd wrote:

    Just wait until people realize that Taco Bell just sells GMO food. Chipotle just got exposed with some of their offerings.

  • Report this Comment On September 24, 2013, at 8:03 PM, realinvestment wrote:

    Late breaking news! Apple just introduced their "next big thing" - iTacos!!

    Apple remains eternally thankful to Fool's Rick Munarriz for this brilliant idea!!

  • Report this Comment On October 17, 2013, at 3:28 PM, thidmark wrote:

    Apple could slap their logo on cat feces, and some of these people would be camped out to purchase it.

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