Brendan Byrnes: Looking at Apple, is this a company that you like, beaten down now, or do you think there are some serious concerns here? I know you're a big Google bull as well, right?
Tom Gardner: Yeah. I like the founder-run companies, so if the founder leaves -- and in the case of Apple that's happened twice -- I want to know they're being replaced by a visionary for a business like this, where your whole product line is going to turn over within five or six years.
I like to know that whoever's running that business is somewhat crazed about finding the new. My concern about Apple is that -- Tim Cook's obviously brilliant, incredible; I'm not saying he doesn't have a vision, but he wasn't a primary visionary at Apple. That wasn't the role that he played alongside Steve Jobs.
I think a lot of founders turn to their right-hand person, who's more of an operating mind, more of a systems builder, to then run the company, and I think that that can be somewhat suffocating to the visionaries in that business. That can slow innovation.
That's my biggest concern for Apple, so I'm not an Apple buyer here. I know a lot of people at The Motley Fool are very bullish. I know the valuation is very low, relative to the prospects for growth and obviously the incredible balance sheet that Apple has, but I also know that there are two things working against Apple. You've got to at least consider these if you're an Apple investor.
One, you don't have your visionary leader in place, and you know that almost no value was created at Apple during the period that Steve Jobs wasn't running that business.
The second thing is you've got a very large company that, in order to justify a larger valuation, has got to eat up more earnings in its market space, and that starts to get the Justice Department interested. We'll see whether that becomes an issue for Apple. It's becoming a little bit of an issue for Google right now.
Look what Microsoft did. They did two things that really hurt that business. One, Justice Department, anti-competitive, and No. 2, they put an operator and a systems builder in as CEO.
I would say it would be a really good thing right now -- this would be a hugely great announcement -- that Microsoft says, "Bill Gates is coming back." Can you imagine? I think the marketplace, the enthusiasm for Microsoft if Gates said, "I'm coming back as CEO and I'm committing to be back for the next seven years, or the next five years, and at the end of my tenure I'm putting a visionary in charge of this company."
Steve's done a lot of great stuff through a lot of difficult times for Microsoft, but right now the Ballmer tenure has not been a great tenure for Microsoft. They've faced a lot of challenges during that period, but they lack the visionary, and that's what I worry about with Apple.
