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Done with AAPL



September 24, 2012 – Comments (5) | RELATED TICKERS: AAPL

I believe I informed you in my last post that I had sold 1/2 my AAPL stake on the eve of the entire stake achieving a one-bagger, so that, as Cramer says, I was playing with "house money." Apple's current P/E, minus cash, is about 16 - on the high end of what it usually is.

But valuation and price appreciation are only part of why I sold.  I recently installed the OS 10.8.2 update.  iCloud integration is built in to this version of Mac OS like never before.  The implementation was buggy and released early, and everything on my computer - mail, calendar, chat, notes, web bookmarks - broke, demanding my iCloud password and then choking when I input the password, with no explanation other than "incorrect password."  The password was correct; checking, which a user should never have to do, revealed that I had not accepted the new iCloud TOS.  Of course, those TOS had never been offered to me.  Signing out of iCloud, and then back in, corrected that problem.  

However, signing out of iCloud also gave me a series of increasingly threatening dialogs warning that some of my data would be nuked if I proceeded. At the end of the process, my web bookmarks were munged and data was lost; and all my calendars were stored on iCloud only; the local copy was deleted.

I don't particularly want to use iCloud and I was not given the option of whether I wanted to; my penalty for staying signed out of it is that my local calendars were nuked and I lost a lot of bookmarks.  God knows what would have happened had I started storing documents in 'the Cloud.'

Because I was annoyed about this, I read the iCloud TOS and the privacy policy.  Most of this sounds pretty benign; there were two features of these policies that are worth commenting on:

1)  Apple notes they will send your data out of the United States.  They don't mention that this is where contracts made with US users do not apply and cannot be enforced.  Therefore Apple's end of the agreement is legally null - they can do as they please.

2)  Apple reserves the right to modify its privacy policy and TOS at any time.  They will attempt to notify you at your iCloud email if they do so.

So the TOS and privacy policy amount to: We will do as we please.

Threatening to nuke my data, and then making good on the threat, when I logged out of a service I never consented to log in to, was an eye-opener. This is a new Apple.

I am an old Apple user, since 1981; I remember once when Steve Jobs lost his CEO job and his replacement was a guy who was world famous for optimizing supply chains and delivering product to every corner of the globe on time.  No, I don't mean 2012, I mean 1996.  Or wait, maybe I do mean 2012.

As a passionate Apple fan, I have been annoyed at Apple's decisions before.  But the last time I felt like Apple had, philosophically, gone off the rails, was 1997, when I tried to order a PowerMac 8600, waited 4 months (!) for the order to be filled, only to have it cancelled with no explanation and no contact, and to be told, when I called to complain, that if I really wanted a powermac I should buy a 7300.

It may be that no one cares about things like the above; that trusting your data to the 'cloud' is the way of the future; and that customer expectations are not so important as the march of technological progress.  My privacy concerns were brushed off by my friends who work at Apple as 'paranoia.'  My girlfriend thinks I should switch to Ubuntu. But the last time I had this sinking feeling in my gut, Apple shares went on a ten year decline.  I am thinking long and hard about whether I want my 'house money' in Apple over the long haul, or whether I couldn't find a better place to put it.

5 Comments – Post Your Own

#1) On September 24, 2012 at 2:14 PM, Leandro74 (< 20) wrote:

I had a similar experience with my iPhone 3. When the Apple released the iPhone 4, the rolled out the new iOS to the iPhone 3s as well, rendereing my (smart)phone completely useless. No warning, no option, just download it.

It was a big dissapointment for me, and began to realize that at its heart, Apple is a very arrogant company. I don't like arrongants, much less when they actually fail to live up to their reputation.

All you described is part of this "arrogant guy" that is Apple.


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#2) On September 24, 2012 at 8:03 PM, awallejr (34.72) wrote:

Well a colleague of mine was trying desperately to pre-order the Iphone5.  My advice to him was just wait and see what "bugs" will pop up first.  I was planing on getting it but am now leaning towards the Samsung s3.

You might want to consider reinvesting some of that Apple money into Google.

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#3) On September 24, 2012 at 10:08 PM, constructive (99.96) wrote:

Android OS updates have probably bricked a lot more phones than iOS updates (I have personal experience with a few). I don't think it has anything to do with arrogance, it's just the result of some bad engineering decisions.

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#4) On September 25, 2012 at 5:18 PM, Frankydontfailme (29.43) wrote:

Mountain Lion also made many old (rosetta universal pc apps) applications defunct... arrogant decision. I installed Windows 7 on my mac, will just buy a Windows next time.. at least the software works.

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#5) On September 28, 2012 at 12:38 PM, kristm (99.63) wrote:

AAPL is a 43-bagger for me and I have no plans to let go of it. Diversify yes, but not cut back on Apple. They still have a lot of space to grow.

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