Tags: Faber | Apple | bust | Sculley

Faber: Apple 'Could Go Bust'

By Michael Kling   |   Thursday, 17 Oct 2013 08:00 AM

Apple may end up on the trash heap of failed high-tech companies, says Marc Faber, editor and publisher of the Gloom, Boom & Doom Report.

The company's bankruptcy isn't imminent, Faber told CNBC.

"This is the kind of stock I'm really not interested in," Faber noted.

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"I'm not saying it will go bust. It could go bust eventually — not tomorrow and not the day after tomorrow."

Faber compared Apple with Polaroid in the 1970s. Like Apple, Polaroid was led by an innovative founder, Edwin Land.

"Dr. Land, who was the founder of Polaroid, had more patents under his head than anyone else in the world," Faber proclaimed.

But Land quit his research position at Polaroid and left the company's board of directors in 1982. Following Land's departure, the company stagnated and floundered, eventually filing for bankruptcy protection and selling its business units.

The high-tech industry is full of companies that were once seen as almost invincible stalwarts, but became has-beens as they failed to keep pace with advancing technology or changing trends.

"We have many other examples of high-tech companies that just faded away," Faber argued.

Apple's main problem, according to Faber, is that it focuses on producing unneeded, frivolous products. "It's basically a toy company for grown-ups," he stated.

On the surface, its fundamentals are strong, as it has huge cash horde, enormous revenues and a valuation of over $450 billion.

Former Apple CEO John Sculley takes the opposite view of the company's future. He has faith in current Apple CEO Tim Cook, he told CNBC in a separate interview earlier this month.

"I think Cook is doing a terrific job. He's not trying to be Steve Jobs; only one person could be Steve Jobs and that was Steve," said Sculley, who was CEO from 1983 to 1993.

"Steve could make the big creative leaps. What Tim is doing is continuing the Apple philosophy of no compromise and quality of their products and great styling," Sculley noted. "I think people are giving Apple a bum rap on what is still a great company with great products."

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