10 Reasons Not to Buy Apple 42 comments
Hao Jin
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1. Highly competitive markets
The chart below shows Apple's (AAPL) revenue share according to product. All of Apple’s product lines are in highly competitive markets and subject to rapid technological change and aggressive pricing. For example, the iPhone faces increasing competition from other Smart Phone makers like Nokia (NOK), Research In Motion (RIMM), Palm (PALM), and even Google (GOOG).
click to enlarge
2. Lower margin
Business Week reported on June 19, 2009 that the cost of components for Apple’s iPhone 3G is $179.16, while its retail price starts at $199. The App Store offers a selection of more than 50,000 applications for iPhone users to download. However, App revenue per phone is about $27 and Apple’s share of that is 30%, or about $8, according to The Wall Street Journal (source).
3. iPhone relies on single carrier
In countries like the U.S., U.K., Germany, Spain and Ireland, Apple relies on a single cellular network carrier to provide service for the iPhone on an exclusive basis.
4. No room to grow for wireless market
In the US, 90% of Americans eligible to use a cell phone already have an account. There is simply no meaningful growth in this market sector.
5. No room for iPod growth
iPod accounts for 39% of Apple’s revenue, more than Mac. Sony Corporation (SNE) has sold 385 million Walkman machines worldwide in 30 years. Apple has sold more than 210 million iPod machines worldwide in eight years. (source).
Apple has a Microsoft-like monopoly on the MP3 player market. In the US, the iPod has nearly 90% market share. The iTunes music store sells 80% of all digital music sold online. It’s the 3rd largest music retailer in the US, just behind Wal-Mart Stores Inc. (WMT) and Best Buy Co. Inc. (BBY), according to Leander Kahney, author of Inside Steve’s Brain.
6. Wrong market target
Apple’s goal is to “provide consumers with a better lifestyle experience.” Unlike Research In Motion, Apple’s target segment is consumers and small/mid-sized business ("SMB"). We are still in the middle of a global consumer crisis and Apple isn't immune to the downturn. Apple's slice of the U.S. computer market fell to 8% in the fourth quarter of 2008, from 9.5% in the third quarter of 2008, according to Forbes (source).
Besides, except for few fans/geeks, consumers are not really eager to upgrade to new gadgets. A study found that the average American consumer will fumble with a new device for only 20 minutes before giving up and returning it to the store, even though these days most devices are “Plug and Play” (better than “Plug and Pray” a few years ago).
7. Heavy investment needed for Mac stores
Apple had 252 stores open as of March 28, 2009. They required substantial fixed investment in equipment, lease improvements and inventory controls.
8. Steve’s health
There’s little evidence that increased R&D investment is linked to better results. It’s the process, not the pocketbook, according to the management consultancy Booz Allen. Without Steve Jobs, no matter how much more money Apple spends in R&D, there are unlikely to be more many new, revolutionary products coming to market from Apple soon.
9. Unclear future strategy
The next big thing in consumer electronics seems to be in home digital entertainment. With iPhone, Apple is moving into communications. I doubt iPhone could be a central control for home entertainment systems.
10. SEC investigation
Apple’s past stock option practices and the restatement of financial statements may result in additional litigation against the company.
The tech sector might be a good place to be in this uncertain environment, as most tech companies have plenty of cash and little or no debt. However, it is hard to predict who would be the winner. For me, ETFs such as PowerShares QQQ (QQQQ) or the Technology Select Sector SPDR (XLK) are a safer bet.
Disclose: I have long position on QQQQ.
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This article has 42 comments:
Also, the QQQQ holds many names that aren't tech companies - it's actually not a tech pure-play at all. Again, this would favor your being long XLK and not QQQQ. Personally, I like QQQQ as an alternative to the S&P 500, with its heavy but not exclusive emphasis on tech, the last thing America still produces and exports the world over.
You've a huge misunderstanding of iPhone profits. Reread the WSJ article you cite. Apple's gross profits per iPhone (telecom subsidy included)are estimated to be $400+ (not your $27).
"On a per phone basis, Wu estimated that Apple gets about $600 a phone..." from your WSJ source.
PS - You also messed, up big, time in points 1, 4, 6, 7, 9, and 10, but I won't get into those.
PPS - Turning lemons to lemonade, consider going long aapl (as I am).
BTW- how old are ya? Is this a high school report of some sort?
If I follow your wisdom who should I invest in? Point 1. The fact that a market is competitive doesn't mean there are not winners and losers. # 2 If you can read a financial statement. Go to Apple's investor web site and calculate the actual margin on the Iphone using the data provided by Apple. If you can't do a basic calculation like that you don't deserve to publish your article on a financial web site. The margin on the Iphone is about 55%. #3 is so what. They were new to the business and did exclusive deals for a few years with a number of carriers. Did this slow sales for the first couple years probably, but they are quite capable of adding these other carriers in the future so I don't get your point. The exclusive deals allowed them to bring a new device to market with great margins provided by the carrier subsidy.
#4 Gartner projects the smart phone market to grow 26% in 2009 which is the segment the Iphone would be included in. I think you should look at the correct statistics. How fast did the Iphone grow YOY or model over model. If you run those numbers then your picture might look different. Don't forget your deferred revenue accounting which means Apple is still recognizing revenue for every single Iphone sold and only this qtr will have two years of sale.
#5 Can you tell me how many handhelds Nitendo or Sony sold in the gaming market? Because until the App store opened Apple sold zero Itouches for gaming, but today they probably capture some of the handheld gaming market a new growth area, and what if this year they add a camera/video capability to the touch or a gps will they capture any of the dedicated point and shoot camera sales or PND sales.
#6 I love your statistics and your short term view of the world. If you expand your horizons past the current recession Apple's MAC growth has been phenomenal but it would ruin the story. By the way how has the rest of the PC world been doing this year? I guess it will never recover and Apple will never grow again.
#7
Will not argue that the Apple store was a huge investment, but have you ever compared the revenue per square foot of retail space to any other retailer in any market? You might find that Apple has the most profitable retail operation bar none in any business. Do the research and then tell me Apple made a mistake building their own stores
#8
Is a joke. Steve was on medical leave and he is doing great along with the company. As a great leader he has a strong bench and some are more then capable of filling his shoes
#9
Where did you read about Apple's future strategy. Do you have a published white paper or something because I follow Apple daily and I have never seen a published strategy but as far as execution they seem to be doing well
#10
The SEC investigation was terminated and pretty much any large company battles litigation on a continuous basis.
Good luck with your investments because with this kind of analysis you are not ready to invest in individual stocks. The QQQQ are probably a wise bet for you because you can't figure out good well run companies with great growth potential.
"No room to grow in wireless market" ? The smartphone market is one the fastest expanding markets around. Apple sold more iPhone 3GS in a shorter time, 1 million in a weekend although launched in fewer countries in a recession than the 3G. People are upgrading from normal cell to smart phones. People changing from Samsung, Nokia etc to iPhone. The mobile computing market, small powerful computers like the iPhone, iPod Touch and the rumored iTablet are the next big thing in computing. While others are saying it's equivalent to the birth of the PC and internet revolutions you've got "no room to grow". Forbes: "Collins Stewart analyst Ashok Kumar estimates Apple shipped 6.8 million phones in the June quarter alone" , remember when the iPhone first came out Apple hoped to sell 10 million a year.
You say "Apple's slice of the U.S. computer market fell to 8% in the fourth quarter of 2008, from 9.5% in the third quarter of 2008, according to Forbes (source)." Did you actually read the data that's been coming out the last week or so? Morgan Stanley : " "Apple began to outperform the broader commercial PC segment -- with commercial Mac shipments up 25% month-over-month in May versus market growth of just 1%," That doesn't even fully take into account the spectacular sales of the new Macbooks, the new 13" Macbook Pro is selling out. Apple Insider: "Apple's newly-coined 13-inch MacBook Pros appear to be off to a hot start, with the company reportedly having difficulty keeping some of the new models in stock as it enters the heart of the back-to-school buying season. In a note to clients Tuesday, Piper Jaffray analyst Gene Munster pointed out that the Apple online store is currently reflecting lead times of 7 to 10 business days for the faster of the two 13-inch MacBook Pros. He notes this is the most extensive delay affecting the company's 13-inch notebook models ever.
The analyst, which regularly tracks and records lead times for products on the Mac maker's online store, said he had to look back more than two years into his records to find similar delays, and even then they spanned just 5 to 7 business days. "
As for iPod Saturation. Many people are shifting to the higher priced iPod Touch due to the thousands of apps available. Yesterday numerous articles e.g. at least 3 articles on Zdnet (a PC oriented site) alone! said that the Touch if it gets the rumored camera (Tech blogger Michael Arrington reported Monday that Apple has placed orders for a "massive number" of camera modules for the iPod.) it will be a 'disruptive', a category killer. Read Forbes "Why Apple Could Kill Your Camera". In short a camera equipped Touch will sell like hotcakes.
Won't bother to comment on the rest but the above is enough to show how poorly researched this article is.
PS - I disagree with many of your 10 points
Selling to the consumer market is a risk? Sorry, but the corporate market is where most of the trouble is. Even Microsoft is laying people off. If you need further proof, look at the Dell results.
It is shamfully embarrasing to suggest Apple makes less than $30 on iPhones.
Are you suggesting Apple is planning new "substantial fixed investment in equipment, lease improvements and inventory controls in all its 250+ store?
Nokia and Palm have been losing market share in the smartphone category ever since the iPhone came out. Palm may not even be around a year from now, with its negative equity, heavy debt, and the rate it's burning through cash. RIMM's 2 for 1 sale is over. They will start losing market share this year. Some competition!
The most ridiculous statement is number 4. That statistic hasn't changed from last year, or are you suggesting 90% of people have smart phones? Do you actually believe that people who buy cell phones these days never owned one before?
Regarding Steve's health and SEC investigations: give it a rest, that horse is dead.
Can you say with a straight face that you expect all phone manufacturers to offer phones which will be a central controls for home entertainment systems, and Apple for some reason will miss the boat? Never mind that there is a remote app for Apple TV.
#2 - if you think apple's margin on the iphone 3GS is $199-$179 then WOW.
#4 - it's called smartphone growth, people switching from 'dumb' phones like my nokia with the same features as the original minus snake, arguably nokia's best feature ever. Their growth is not from people new to cell phones, that's for the Jitterbug.
#5 - The Ipod does not need growth, just maintaining nearly 100% marketshare will keep the ipod line a cash cow for many years. People buy new iPods every few years.
I started a Mac software company in '84, worked closely with Apple in the 80s, and again in the mid 90s with a second software company. The statement in #8 that Apple probably won't be producing any more "revolutionary" products seems so off base to me. I would predict exactly the opposite based on what I know of Apple, the company.
I also think that most people don't see the significance and the possibilities of iPhone apps . . . yet. (People who follow these things probably do.) Being the central control of a home entertainment system is a good example of exactly what the iPhone could be programmed to do.
"Don't you dare mention that anybody has a chance against them!"
"Don't you even THINK that at this price, it might be better to wait! Even when the market retreats, this stock will shoot up like a rocket!"
"If you're not long on AAPL 100 percent of the time, you're an idiot!"
Jesus, guys. The IPhone is pretty cool, but why not just address his points without all the hate?
Seriously guys, its dangerous to fall in love with your stock. That's how you end up holding at $200, and riding it down to $80.
Only a company with major threats would rise and fall so easily. That much is obvious.
On Jul 08 02:21 AM Paul H. M. wrote:
> "Don't you dare mention that anybody has a chance against them!"
Pray tell, who and how?
> "Don't you even THINK that at this price, it might be better to wait!
> Even when the market retreats, this stock will shoot up like a rocket!
> "If you're not long on AAPL 100 percent of the time, you're an idiot!"
No one here is claiming you should be be long anything 100% of the time, or when the stock will shoot up or that you should jump in and put all your money into AAPL.
> Jesus, guys. The IPhone is pretty cool, but why not just address
> his points without all the hate?
There is no mention of hate either, just incompetence.
> Seriously guys, its dangerous to fall in love with your stock.
> That's how you end up holding at $200, and riding it down to $80.
> Only a company with major threats would rise and fall so easily.
> That much is obvious.
No dear boy. In case you were born yesterday, let me inform you that in addition to investors we have speculators, manipulators, people who need to raise cash to cover other losses, etc. Do you blame the quality of a house when its price doubles and then halves in a matter of a few years? Was there something wrong with the oil that was pumped out of the ground last year that we saw prices go to $140 and then back down to $60?
This Hao Jin fellow comes up with 10 reasons to claim Apple is a bad investment. Not one of them has to do with its valuation or the company's financial condition. He doesn't even suggest that the tanking economy will hurt any other company than Apple. Palm, Nokia, etc. are supposedly in a position to offer stiffer competition in this economy. Microsoft, with it's "90%" OS share is not cited as bad investment because of a "saturated" OS market. Why does he bring up Sony's walkman in the fifth "reason"? Is he suggesting that the 385 million is a ceiling for number of music players a company can hope to sell?
On top of that most of his numbers and claims are factually incorrect. Apple's iTunes store passed Walmart to become the top music seller in April of 2008. Ho says it's third behind Best Buy!
I suppose someone who writes stuff on a financial web site should be aiming to inform people. In this case, the readers are informing this guy how wrong his information is. And it's not just one or two or five errors - it's just about everything he says. That, is embarrassing.
This article is sheer bull. Hao Jin's blog is a pathetic example of the many wing-tipped Wall-Street analysts who have never used an Apple product and have no understanding of the magnum force of "cool."
He is obviously not an owner of any Apple product. I don't care if he buys them or not, but I would like to see some homework behind his postings. For this one, I think he should lose his job. Many otherwise qualified people have lost theirs in this economy for far less egregious errors.
Is there a competition going on that I don't know about?
If the premise is to own or not own Apple stock for profit, then your argument is meaningless to a share holder. Lets face facts about the economy for one, even if Apple could gain share in the computer market, it is a stagnant market.
People are buying cheaper computers and not as many of them, this is not 2005 where you could take a line of credit out on your house and spend, spend, spend. And other than people coming out and buying the upgraded iPhone, I don't see too many crowds in the stores outside of Apple's N.Y. 5th Ave. place. And as someone reported yesterday that srore isn't crowded either
The economy is still in a downward spiral, the government is still on a spending binge with no signs of letting up and a lot of my friends that had very large incomes are out there looking for a job and taking whatever they can get because they are scared.
While from a sales and marketing prospective it is great to say the iPhone took another percentage point share of the smart phone market, it doesn't help Apple (stock) if that market is soft.
On Jul 07 04:50 PM foxxx333 wrote:
> Apple's added value is its OS, including iPhone 3 and its Safari
> browser. The hardware in its MP3 player is available elsewhere, but
> iTunes and the iPod, iPod Touch software is available only from Apple.
> These products and the iPhone are actually small computers. Their
> numbers will help convert massive numbers of persons who, until now,
> used PCs driven by Microsoft's OS or by variants of Linux. Because
> OSX is so stable, based on a Unix kernel, it offers a good alternative
> to Windows, which still has a commanding share of the PC market.
> These factors lead me to believe that Mac computers will continue
> to gain share at MS's expense. I am long AAPL and short MS, originally
> in equal dollar amounts. Current dollar position is better than 3:1
> AAPL and continues to increase. As the author points out, the consumer
> market is very competitive. Apple has been rewarded by consumers
> because Apple continues to provide very satisfying products to those
> who seek such satisfaction. I expect Apple's GMs to remain above
> those of most of its competitors, if not all of them. Only the policies
> of the current administration give me reason to be more cautious.
> So far, Obama's policies have destroyed about $4.5T in equity. His
> bias against free markets, favoring central controls, is a much greater
> threat than MS, Sony, HPQ, Ericcson, Palm and RIMM combined.
However apple are brilliant marketeers. Here in UK (not sure about Europe) every man, dog, woman and cleaner has an iphone. People will move accounts off networks to get an iphone. Further the imac's are also an excellent laptop and with an alternative operating system significantly more stable than windows !
I understand apple can move the ipod to music streaming via the iphone/itunes. This will keep up with the newer competitive entertainment alternatives.e.g. spotify.
The mac stores in the UK , although are selling outlets they are more supposed to be a showroom (hence the higher investment costs) to demo the products - I doubt very much apple will want to have a store in every town in the US and Europe. It is not supposed to be a store like TKmax or Walmart .
Point 1 says that each revenue stream is in a highly competitive sector but point 5 claims iPod's monopoly limits its potential for growth. Make up your mind.
Also, almost anyone with any knowledge of the iPhone business model is aware that the $199 retail price of the 3G is based upon heavy subsidization from AT&T and does not accurately reflect Apple's per unit revenue.
On Jul 08 12:17 PM ukdaytrader wrote:
> I think the article is good at least it provides the other view,
> particularly where everyone always thinks its a good buy.
>
> However apple are brilliant marketeers. Here in UK (not sure about
> Europe) every man, dog, woman and cleaner has an iphone. People
> will move accounts off networks to get an iphone. Further the imac's
> are also an excellent laptop and with an alternative operating system
> significantly more stable than windows !
>
> I understand apple can move the ipod to music streaming via the iphone/itunes.
> This will keep up with the newer competitive entertainment alternatives.e.g.
> spotify.
>
> The mac stores in the UK , although are selling outlets they are
> more supposed to be a showroom (hence the higher investment costs)
> to demo the products - I doubt very much apple will want to have
> a store in every town in the US and Europe. It is not supposed
> to be a store like TKmax or Walmart .
Just to pick a couple,
#5-Apple is in first place in music sales, not third.. has been for a few months now!
#1-the phones are underwritten by AT&T, providing $400-$500 in profit after build costs, per phone, plus a piece of the monthly charges! Can you say Cash Cow!
#4-look at growth in SMART phones, not cell phones for any meaningful analysis! the iPhone has driven a rapid increase in SmartPhone sales.
#7-the Apple Stores are the MOST successful retail store in history! Generating more than twice as much business per square foot than the number 2 retail stores, Tiffany's! Retail doesn't hurt Apple, it lifts its sales to unbelievable heights!
Who are you? Why did you write your perceptions rather than your researched facts? Are you looking at sources five years old? Mysterious....
On Jul 08 10:54 AM Techtrader10 wrote:
> People are buying cheaper computers and not as many of them, this
> is not 2005 where you could take a line of credit out on your house
> and spend, spend, spend. And other than people coming out and buying
> the upgraded iPhone, I don't see too many crowds in the stores outside
> of Apple's N.Y. 5th Ave. place. And as someone reported yesterday
> that srore isn't crowded either
>
> The economy is still in a downward spiral, the government is still
> on a spending binge with no signs of letting up and a lot of my friends
> that had very large incomes are out there looking for a job and taking
> whatever they can get because they are scared.
>
> While from a sales and marketing prospective it is great to say the
> iPhone took another percentage point share of the smart phone market,
> it doesn't help Apple (stock) if that market is soft.
Strangely enough, I was unable to find any of the "AAPL cult" quotes you referenced anywhere in the comment stream. Nor could I find any comments arguing in favor of anything remotely similar to the quotes you referenced. Did you have any specific rebuttals to any of the comments criticizing this blog posting or do you just like to make fun of people?
On Jul 08 02:21 AM Paul H. M. wrote:
> I love the AAPL cult!
>
> "Don't you dare mention that anybody has a chance against them!"
>
>
> "Don't you even THINK that at this price, it might be better to wait!
> Even when the market retreats, this stock will shoot up like a rocket!"
>
>
> "If you're not long on AAPL 100 percent of the time, you're an idiot!"
>
>
> Jesus, guys. The IPhone is pretty cool, but why not just address
> his points without all the hate?
>
> Seriously guys, its dangerous to fall in love with your stock. That's
> how you end up holding at $200, and riding it down to $80.
>
> Only a company with major threats would rise and fall so easily.
> That much is obvious.
The chart below shows Apple's (AAPL) revenue share according to product. All of Apple’s product lines are in highly competitive markets and subject to rapid technological change and aggressive pricing.>>
Yes, and what tech companies don't compete in highly competitive markets? Wouldn't it be better to say that Apple has ALWAYS competed in highly competitive markets and has carved out a successful niche in all of them? They are at the forefront of rapid technological change and have been driving aggressive pricing where they have pricing power, like in iPods and iPhones, iTunes and the AppStore.
You wrote: <<2. Lower margin
Business Week reported on June 19, 2009 that the cost of components for Apple’s iPhone 3G is $179.16, while its retail price starts at $199. >>
This illustrates that you don't even know that the iPhone is subsidized, and is Apple's highest margin product!
You wrote: <<3. iPhone relies on single carrier>>
Uhm, room for growth?
You wrote: <<4. No room to grow for wireless market
In the US, 90% of Americans eligible to use a cell phone already have an account. There is simply no meaningful growth in this market sector.>>
Yeah, and there was no room to grow when Apple entered this sector two years ago, and look at how they've grown! You need to stop overgeneralizing and look at specific sectors that Apple is targeting. They are targeting smartphones, not the general cellphone market.
You wrote: <<5. No room for iPod growth>>
Apple is evolving the market from pure music players to include game players and cameras and whatever else they can think of. There's plenty of room for growth if you look at what the iPod touch can do.
You wrote: <<6. Wrong market target>>
And, what is the right market target? The one Dell is in? Why is BB trying to expand into the consumer space? And, pc share stats are skewed by the proliferation of cheap netbooks. You need to segment the pc market to those areas Apple actually competes in to show that their market share is declining.
You wrote: <<7. Heavy investment needed for Mac stores>>
Yes, and Apple has about $30B in cash that they can spend. As an investor, would you rather they not have stores?
You wrote: <<8. Steve’s health
It’s the process, not the pocketbook, according to the management consultancy Booz Allen. Without Steve Jobs, no matter how much more money Apple spends in R&D, there are unlikely to be more many new, revolutionary products coming to market from Apple soon.>>
Of all the companies out there, Apple may have the strongest corporate culture of all. They have internalized "the process", so that all the top execs from Cook to Ives to Shiller know it. Why should any investor rely upon your unsubstantiated conclusion that there won't be any more new and revolutionary products?
You wrote:<<9. Unclear future strategy
The next big thing in consumer electronics seems to be in home digital entertainment. With iPhone, Apple is moving into communications. I doubt iPhone could be a central control for home entertainment systems.>>
Wow, you are clueless. The iPhone AND its descendents, are the most likely devices that will be the central control for home entertainment.
You wrote: <<10. SEC investigation
Apple’s past stock option practices and the restatement of financial statements may result in additional litigation against the company.>>
The SEC investigation of Apple's stock option grants is CLOSED.
I am thinking of writing an article on ONE REASON NOT TO READ HAO JIN's posts: 1. Total lack of clear thinking.
I don't think it's correct to refer to the "AAPL cult". Yes, there are many "fans" of Apple. But this is a financial board, where the discussion is aimed at the question, can we make money on Apple's stock?
I'm still a rookie when it comes to trading (less than a year), thus I've tended to stay with things I can understand or have some feel for. For me, Apple is such a company (see my background in a post earlier). At least half of the gains I've made so far have come from trading Apple, including puts and calls.
I thought that the article was mostly wrong, based on my knowledge of Apple, the company. Making comments to that effect is just part of a (hopefully) useful discussion. Commenting that those of us who disagree with the article are part of some cult implies we are myopic and that we will see what we want to see, not what is actually there. That's what I think is wrong about your comment. We are also, like everyone else, just trying to evaluate, all the time, whether or not Apple will continue to prosper.
I'll add that I respect that the author has put himself out there, stating his opinions, giving all of us fodder for discussion. Let's not lose sight of that, even if we disagree strongly.
On Jul 08 02:21 AM Paul H. M. wrote:
> I love the AAPL cult!
> . . .
for the next six months?
until 2011?
ever?
While I am not a professiona investor I do know apple is a leader.....
you think palm would have come out with the pre as designed without the development of the iphone.
ipod is the equivalent of xerox scotch tape or kleenex.
and apple computers vs msft based machines is only growing.
YOU ARE WRONG AND I AM GOING TO PUT A NOTE IN MY ICAL FOR THIS DATE IN 2010 AND 2011 TO UPDATE THIS POSTING
On Jul 07 04:50 PM foxxx333 wrote:
> Apple's added value is its OS, including iPhone 3 and its Safari
> browser. The hardware in its MP3 player is available elsewhere, but
> iTunes and the iPod, iPod Touch software is available only from Apple.
> These products and the iPhone are actually small computers. Their
> numbers will help convert massive numbers of persons who, until now,
> used PCs driven by Microsoft's OS or by variants of Linux. Because
> OSX is so stable, based on a Unix kernel, it offers a good alternative
> to Windows, which still has a commanding share of the PC market.
> These factors lead me to believe that Mac computers will continue
> to gain share at MS's expense. I am long AAPL and short MS, originally
> in equal dollar amounts. Current dollar position is better than
> 3:1 AAPL and continues to increase. As the author points out, the
> consumer market is very competitive. Apple has been rewarded by
> consumers because Apple continues to provide very satisfying products
> to those who seek such satisfaction. I expect Apple's GMs to remain
> above those of most of its competitors, if not all of them. Only
> the policies of the current administration give me reason to be more
> cautious. So far, Obama's policies have destroyed about $4.5T in
> equity. His bias against free markets, favoring central controls,
> is a much greater threat than MS, Sony, HPQ, Ericcson, Palm and RIMM
> combined.
Never criticize AAPL on a public forum. There are too many fanboys and you will be flamed forever. Your list of issues is sort of tired. They are issues and worries that are speculative and sound like the list that a venture capital guy says to a person seeking money for his idea. My advice is to go to an Apple store. It will be packed. And we're in a recession. Apple is the best of breed for now. Any drop in price will be driven by market drop and not Apple demise.
Good points. The only thing I would dispute is the fanboys flaming -- at least on a financial/investing forum.
I think most of us here would like to hear a good, well-reasoned argument against Apple. As you point out, this article was not that. The vast majority of the criticism here was directed at the author's logic and his understanding of the issues.
There are probably lots of dangers to look out for with Apple, and even lots of external factors that can influence the stock. But this author didn't seem to understand some fundamental things about Apple's business or the markets is operates in: Apple gets a huge subsidy for their iPhone from AT&T (making it a very high-margin product); the introduction of the iPod Touch has moved sales from cheaper iPod Nanos to higher-end Touches; Apple's retail stores have the highest sales per sq/ft of any retailer; Apps are growing iPod sales by moving the product into gaming; the smartphone market is growing at a huge rate.
The author is simply not qualified to speak on the issue.
Hello? Anyone out there? Sure is quiet...