My birthday's in a couple of weeks. My youngest daughter loves to get ideas from me for my birthday. She's really into giving and receiving the right presents.
So, when she asked me what I wanted I told her I wanted the first-season DVD of "Sons of Anarchy." Everyone tells me it's like "Hamlet" and I was always a big fan of Shakespeare's work.
She texts me back immediately -- we ceased to communicate by actual words a long time ago, but I would recognize her voice if she called -- and writes she isn't going to buy it because it streams on Netflix (NFLX) so it is a total waste of money. Memo from me to you: any time, any time whatsoever that a teenager is worried about spending your money, sit up take notice. My daughter swears by Netflix more than she used to swear by Apple (AAPL).
I should have figured that, After all, the new televisions of even the most dubious quality come with Netflix right on the clicker. Can you believe that? No wonder it added 2 million subs this quarter and rallied huge, especially when you consider that it ruled out doing an equity offering to pay for all of its new content. The shorts wanted to buy that stock on the underwriting dip. Forget about it.
My daughter's also the one who told me that she's been buying things off of Facebook (FB) lately, well timed, right when Zuckerberg came on the conference call and said the company had screwed up mobile but was now getting it right. You might have figured that out from when I went positive on its soon after that conference call.
Alas, she is also the one who turned me on to Apple at $50 when she asked for her second iPod because she had a blue one and wanted a pink one as a fashion accessory.
Alas, she and her sister are also the reasons why I had to cool on Apple as they simply didn't want any of the new stuff and are still angry about the cord and the map and the new iTunes. Her sister, the other day, wanted to know when you could buy shares in Twitter because she said that could be a sensational buy.
Which brings me to the takeaway here. Right now there are companies that have no appeal at all to the younger generation. We saw it with Coach (COH) and Tiffany (TIF), two older, out of touch brands that my two kids aren't the least bit interested in, not more interested than they would be shopping at JC Penney (JCP) or using Microsoft (MSFT) software or driving a GM (GM) car.
Yet if you are going to win the younger generation, the generation that will soon have the purchasing power, a generation that is much smarter than we are, you need to talk to kids like my kids. They now think that Apple's old. Not repulsive like a Hewlett-Packard (HPQ) or a Dell (DELL), just old. But that could change on a dime. All Apple would have to do is go buy Twitter, or Netflix, or even an outfit like LinkedIn (LNKD) which, is developing quite a following among younger people joining the workforce. Heck, it could buy all three and really get its business back in touch with what younger people want.
Netflix knows the younger generation better than most think. Apple used to. That's one of the main reasons why Netflix can soar 40% on a 13-cent profit and Apple can plummet $60 on a $13-dollar gain. It's a lesson that Apple better pay attention to if it ever wants to get back in touch with what the next generation wants, even as it is more sure than ever that it does.