Apple Inc. (NASDAQ:AAPL) shares are hovering around $500 after losing significant value after the company’s earnings report this week, but former Apple CEO John Sculley says the company is much stronger than investors are giving it credit for. Speaking on Bloomberg TV, he addressed several Apple-related topics, including what he thinks will be the next big innovation and what he thinks would be a better use of the $150 billion Carl Icahn wants to use for a share buyback.
Apple affected by China rollout
Sculley said one of the things which is affecting Apple Inc. (NASDAQ:AAPL) right now is the rollout of 4G LTE technology in China. He said the process is slower than what investors are factoring in and that China is just beginning the rollout. He notes that right now, the technology is only in 16 Chinese cities, but it will be in 300 of them by the end of the year.
When asked about Tim Cook and whether he’s having trouble becoming like more charismatic CEOs like Steve Jobs or those currently at other companies, Sculley noted that Cook isn’t Steve Jobs and never claimed to be like him. In fact, he said investors seem to have higher expectations for Cook, noting that Jobs had a new innovation every six years, but investors seem to expect one out of Cook every two years, which he says isn’t realistic.
Sculley also noted that Apple Inc. (NASDAQ:AAPL) is no longer valued as a growth stock, although he said it could be if the company entered into a new breakout area. He suggested that mobile payments just may be the area Apple is aiming for.
“If I were going to bet on something, I would bet on mobile payments,” Sculley told Bloomberg TV. “Mobile payments can really turn out to be one of the hottest new areas, and they have 600 million registered users on iTunes that they can convert into mobile payments.”
Apple should buy eBay
He does think it’s a positive that activist investor Carl Icahn bought more shares of Apple Inc. (NASDAQ:AAPL), but he doesn’t think that Icahn’s push for a $150 billion share buyback is a good idea. In fact, he thinks that would essentially be a waste of cash.
Instead, he thinks Apple Inc. (NASDAQ:AAPL) should buy eBay Inc (NASDAQ:EBAY), although he notes that such a purchase isn’t in the company’s culture because it doesn’t typically make huge acquisitions. However, he said eBay would be a great fit for Apple, although he does say Apple might be able to get there in other ways and notes that Apple has a better position in mobile than eBay.