I have been a big fan of apple and its products since ipod. There products have been just "amazing"and breakthrough. From Ipod to Ipad, Apple has been ahead of the competition. They created breakthrough products and also created new markets like Tablets. This was possible through innovation and the main person behind this innovation was Steve Jobs. Innovation and creating innovative products was the Mojo of apple, until the death of steve jobs on October 5, 2011. Majority of the Hedge Funds are heavily invested in Apple because they had confidence in Apple in continuing this innovative Mojo.
Lately this has not been the case. Lot of consumers and investors were disappointed with the lack of innovation in the most anticipated iphone 5. Apple released a substandard product (compared to Samsung). The only reason iphone 5 has lot of demand eventhough it is substandard in features is because the previous iphone owners have invested heavily in the apple ecosystem. Even Apple's greatest supporters agree that the new model has only incremental improvements when compared to the 4S. People who didn't invest in apple ecosystem have embraced samsung phones which offer more innovative features.
Iphone 5 release in India
It is difficult to immediately believe that the latest iPhone would outshine its predecessor in the Indian market. Its biggest lure, LTE (the faster version of mobile Internet) can hold no attraction for prospective buyers in India, for the simple reason that LTE networks hardly exist in India. Even Siri and Apple maps are out of bounds for the indian users. Customers would be reluctant to pay a premium when they cannot use these features. That is probably the reason behind the Apple's share of smartphone sales in India is just 1.2 percent half the level a year earlier, according to the latest report put out by market intelligence firm IDC. Also, there is no concept of signing a two year contract with the service providers in India and because of this the service providers do not offer any subsidized phones. Indian customers would have to pay the full price of Iphone 5($650). Even in the near future the wireless providers cannot offer subsidized phones because it is difficult to track the customers who break their contract. This is creating a significant advantage to android phones. India offer a significant smart phone market and Apple is on the loosing end.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.