Tim Cook=Dirty Harry

 | May 29, 2014 | 3:15 PM EDT  | Comments
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The scrutiny of Apple (AAPL) and CEO Tim Cook is downright insane.

It seems like everyone and his sister has a view on this $3 billion dollar deal to acquire Beats, the headphone company. In the last 24 hours I have heard how it's a huge waste of money, that it's just a way to get some smart people to work for the company and that it doesn't solve any of Apple's real music problems. You hear that Apple's going down the wrong path. That it's flailing. That it's a sign of desperation.

Now, I am no stranger to advising Apple what to do. I have urged Apple at one time or another to buy Netflix (NFLX) to own the living room or Harman (HAR) to own the car or DirecTV (DTV) to own the airwaves. Now, Netflix has gone up five fold since I pressed for that acquisition. That's too expensive. DirecTV's now gone, courtesy of AT&T (T) and I know there are issues with satellite infrastructure that may not have been Apple's cup of technological tea. Harman, which dominates the audio system in almost all cars, is up 30% from where I recommended the bid be put in, but at $7 billion it's still good to go.

But you know what? Who can really complain here?

The stock's been a rocket, having moved to $629 from $400 and change in one year's time, which tells me that Tim Cook's doing a lot of things right, not a lot of things wrong, and that he deserves the benefit of the doubt.

First, Cook's been listening. I imagine he must have been a good listener to Steve Jobs because in the last year he's been an amazing listener to shareholders and analysts alike. Just think about all he has done to answer the detractors. People were worried about stagnant iPhone sales. Don't look now, but the most recent phone iteration, the 5 series, has been a big hit largely because of tremendous software innovation. The critics carped that he didn't do enough in China. He has since stormed China the way Mao did after the war, without any of the attendant bloodshed. The big shareholders, including Carl Icahn, said Cook wasn't being aggressive and opportunistic in returning capital. Did Cook hear? You bet. He's got the biggest, most aggressive and most thoughtful buyback I have ever seen. It defines opportunistic. The dividend's huge.

Then we started hearing rumblings that the retail stores have lost their mojo. So, he hires perhaps one of the single best retail CEOs in the world, Angela Ahrendts, who turned around Burberry using the most innovative social media initiatives on which I have ever laid eyes. She just started. I can't wait to see what she accomplishes and she will accomplish a lot immediately if her lightning speed turn of a really dowdy brand is any indication. I love that hire.

Finally, the big black hole on the conference call has been the decline in iTunes. That's a music technology issue. So, Cook goes out and finds, arguably, the two best music technologists out there, Dr. Dre and Johnny Iovine, and tasks them to turn around iTunes using whatever's in the arsenal, including Beats itself and Apple's considerable war chest. We must remember that Google (GOOG) paid $3.2 billion earlier this year to buy Nest to get inventor Tony Fadell in the fold and we all smiled upon that one, even as Nest has since had to recall a huge number of its home alarms because they don't work. Can you imagine if Apple had made that trade?

Here's all you need to know about Cook. He may be right out of "Magnum Force." Like Harry Callahan, he understands that a man's got to know his limitations. Cook's recognized what his company needs to do. Whether it be to reinvent the cellphone or fix the music business or make the retail stores more relevant or help out his own stock, he's relied on experts inside and, if they aren't there, he's gone out to get or listen to them. He's done it without complaints, methodically and intelligently. I just wish for once we had more Cooks in the stock market kitchen. Life would be a lot easier and there would be a heck of a lot more money made.

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