Cramer: Wall Street Analysts Are Wrong on Apple's iPhone

 | Sep 14, 2017 | 6:44 AM EDT
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Behavioral change comes about with tremendous swiftness these days, depending upon your age. I think one of the reasons why there was so little "wow, got to have it," among the analyst community about the new iPhones is that the analysts themselves are, perhaps, too old to change their ways and recognize that younger people adapt far more quickly than older people to a new phone.

Younger people are far more likely to figure out how to use it, adapt to it, download important new apps older folks may not care about and genuinely care about features that mean little to those who may have started on a Blackberry or were sated by a much earlier iPhone.

Why is that? I think a lot of it has to do with not just the experiential economy, but the way it is documented. Broad generalizations are rife with anecdotal information and short of empirical data, but one thing is certain: the way to figure out what is happening and going to happen is to watch the behavior of your own kids.

Last year, in one week I learned a tremendous amount about these devices. I had my eldest daughter out to our beach house and she demanded that I play Pokemon Go. I had no idea what she was talking about and the only reason I had even heard of it was that Richard Sherman had told me about it in an interview on the Mad Money San Francisco set. That's right; he told me it would be the next big thing.

I went on the tour looking for the various landmarks and played the game and noticed three things: first, it was a total blast. Second, it really taxed the iPhone. Third, it was primitive, almost like Pong or Donkey Kong from when I was growing up. I suddenly could imagine a game that could talk to you in high resolution and allowed you to communicate with others in real time. That's not yet available, but these phones are coming closer and closer and I want very much to see what the X can do along these lines. I know my kids will tell me long before I do.

In the meantime, we had to constantly come back to the house because we had to recharge the phone. Two extra hours would give a lot more playing time and create new, more sophisticated games that can produce a lot more service revenue to Action Alerts PLUS charity portfolio holding Apple (AAPL) if developers get it right.

My other daughter went on a cruise. An actual cruise. As much as I study the cruise ship industry and have loved it ever since Arnold Donald turned around Carnival Cruise CCL and Richard appeared on Mad Money from a brand-new cruise ship, I had no idea that someone in her 20s could want to go on a cruise, least of all my daughter.

But it wasn't just any cruise. It was an electronic dance music cruise, or EDM. Cruises are fun, I get that. More important, though, an EDM cruise is a chance to brand yourself via Instagram. You can show what kind of experience you are having with your iPhone camera when you do it.

You get a phone with better resolution, you get fabulous make-up, and next thing you know you are showing people how much fun you are having and the pictures are great to look at. Video, sound, the water shimmering, next thing you know you are someone else. But you can't be someone else unless it's shown. No camera, no experience.

A new Apple device can allow that experience to be documented better, and allow you to brand yourself and create it in Hollywood style, which is good because you have to post in "wow" mode because you are creating something worth watching.

You think any of these post 50-year-old analysts get that? They don't see anything new, because they don't understand re-branding of 20-somethings. They don't understand silly games. They see everything as incremental. Younger people see everything as the ability to explore the seemingly unexplorable or re-create themselves to friends in a setting that's as compelling as a big screen movie.

These are the kinds of reasons why these new phones with better resolution, more battery life and who knows what else -- it's all surprising -- make it worth the cost. You will scrape anything together to be someone else to stretch the bounds of entertainment. One device can do hundreds of things that Wall Steet analysts would never want to do. That's why it's blah blah blah instead of "wow." That's why these analysts think the stock should be traded.

And that's why they are wrong.

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