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Apple 2014: Don’t call it a comeback

An American icon: the Apple store in Manhattan
Adam Jeffery | CNBC
An American icon: the Apple store in Manhattan

Well, Apple's still not dead.

For the fiscal year that ended in September, Apple netted $35 billion on revenue of $170.9 billion, up nearly 10 percent from 2012. Apple's iPhone and iPad outsold Samsung's Galaxy S and Note by 100 percent, accounting for a difference of more than 120 million units sold. On Black Friday the iPad dominated sales, particularly among Android users.

Even as we witness Samsung's slap-our-name-everywhere in-your face marketing—these numbers make it hard to believe that they spent $14 billion on advertising, while Apple spent approximately $1 billion. At 5.4 percent of its total revenue, Samsung's advertising cost-to-revenue ratio blows away its peers, especially Apple, with a ratio of 0.6 percent. This is one reason that Samsung just scheduled a three-day Crisis Awareness meeting for its top executives.

"The biggest mistake of all was assuming that everyone at Apple—many of the best and brightest—spent the year sitting around playing Candy Crush. As opposed to, say, creating new products." -Jason Stein, Founder, Laundry Service, and partner at Windforce Ventures

Clearly, great products require a lot less advertising. When it comes to high-end smartphones and tablets, consumers value Apple's unique approach to software and hardware as a unified experience.

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Despite these success metrics, 2013 was tough on Apple's long-time shareholders. The stock opened the year trading at $549 before closing at a low of $390 in April and hovering in the $400s for most of the year. All the same, on Black Friday, Apple eclipsed its previous high from Jan. 2, closing at $556.

As Apple's stock price trends upward, the news coverage will follow suit. Most journalists spent 2013 observing that Apple lacks innovation. They overlooked Apple's new iOS, iPhones and iPads—even though the 5s and 5c sold a record-setting 9 million units opening weekend.

The biggest mistake of all was assuming that everyone at Apple—many of the best and brightest—spent the year sitting around playing Candy Crush. As opposed to, say, creating new products.

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Yes, 2014 will bring a bigger iPhone and iPad. However, remember that "product" at Apple means software, too. Tim, Jony and crew remain focused on expanding their ecosystem, starting with two of the most used and most frustrating screens in the world.

iOS in the Car will roll out to the majority of new vehicles in 2014. From Honda to Chevrolet to Mercedes to Ferarri, dozens of car manufacturers have already made deals to bring iOS to the screens in their cars.

More important to Apple's customers is a new television experience. The analog-inspired Comcast UI says it all: Change is coming to TV. It has to. Pretty please.

As cable companies consolidate and become broadband businesses, content rights will loosen up and allow Apple to roll out the video interface of the future. At the same time, television viewership is dying due to the rise of Internet video, especially on tablet and mobile.

With iOS accounting for more than 60 percent of mobile and tablet web usage—well above Android's 25 percent—Apple is well positioned to rule the future of content and data consumption. They don't even need to release a TV set. And that is the key to understanding 2014 Apple: Its cohesive cross-device operating ecosystem is what's driving sales and product development.

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Today the backlash to the backlash has only just begun. Units will continue to sell, new technology will be delivered, and the stock will approach its all-time high (perhaps with the help of an Icahnian buyback).

Media narratives will center on the renaissance at Apple, even though innovation is taking place in Cupertino every day.

Tim Cook will remain cool as a cucumber.

This isn't a comeback. It's business as usual.

—Jason Stein is the founder of social media agency Laundry Service and a partner in Windforce Ventures, a venture capital firm focused on social and mobile. Stein owns shares of Apple. Tweet him at @jasonwstein.

Correction: An earlier version of this story incorrectly stated how much Apple spent on marketing.