4 Reasons to Sell Apple Today

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Apple (Nasdaq: AAPL  ) bears are a dying breed. The iPhone, iPad, and Mac designer is the most valuable company in the world and shows no signs of slowing down. Shares have gained 30% in 2012 -- an astonishing feat for a stock that started the year with an already-huge $380 billion market cap. And even now, smart investors like fellow Fool Eric Bleeker feel that Apple is a solid buy as the next iPad idles on the launch pad.

So the choir of praise is nearly unanimous. But I don't feel like singing along.

The warning signs keep piling up around this supposedly unending success story. That momentum is one red flag in and of itself, but there's lots more. Let me point out four ways that Apple will disappoint investors before too long:

The illusion of hypergrowth
While Apple really is growing at a legitimately exciting clip, investors read way too much into the latest earnings report.

iPhone sales in the first quarter more than doubled YOY. If you see that as the run rate going forward, I've got news for you: The iPhone refresh was unusually late this year and tons of would-be buyers held off on buying one until the holiday quarter. Did you forget the miss in the previous quarter already?

It's okay. I understand. Denial is a perfectly healthy coping mechanism. But that fourth-quarter disappointment set the stage for a tremendous upsurge of iPhone sales over the holidays, and also dragged shares prices down to prime this year's impressive run.

It really happened: iPhone sales in the fourth quarter missed analyst targets by a country mile, jumping a mere 21% YOY. The real growth rate lies in between these two extremes. So should your realistic expectations for future growth.

The iPhone as a commodity
Right now, Apple holds a unique spot in the smartphone market. No matter how hard Google (Nasdaq: GOOG  ) tries, the next Android version or top-of-the-line flagship phone never quite gets the attention that Apple's latest iteration does.

I'm sure this won't last forever. It's always tough to pin an end date on recent fads. When American Idol was new and fresh, I though the show would keep its novelty appeal for four seasons or maybe five, but it took 11 years before viewers started switching the channel on that particular show. So although my timing may be off a little bit, but consumers will eventually turn their attention elsewhere.

That's really all Apple's iStuff is -- an enormous and very profitable fad. It's the Pet Rock of the new millennium.

And that leads straight into…

The "cool factor" is fading fast
You heard me. Apple is getting too popular for its own good.

"All of a sudden, every teenage girl has an iPhone," says Canaccord Genuity analyst Michael Walkley. "The real danger is that Apple becomes so mainstream that there is a breakaway by consumers to something new."

Do you really think that these superior growth rates can continue when the young ones start treating Apple's products like a McPhone? Big sales will linger for a while even after the trendsetters turn their back on Cupertino, but the shark will have been jumped and the only way is down.

Think it can't happen? Think again.

There was a time when Research In Motion (Nasdaq: RIMM  ) and Palm set the standards for mobile computing. RIM's text-machines gained the endearing nickname "Crackberry" as you could pry those gadgets only from their users' cold, dead hands.

That was then, this is now. iPhones and iPads are the new iCrack products. You'll notice that nobody cares much for the BlackBerry anymore as RIM circles the drain. Palm is already dead, snapped up by Hewlett-Packard (NYSE: HPQ  ) for pennies and then demolished, piece by piece.

Neither Palm nor RIM ever quite reached the lofty heights that Apple inhibits today, but you know what they say: the bigger they are …

The final straw
And that brings me to the real deal breaker. The iPhone is too expensive. The networks that already hate the low margins it brings them can't be expected to pay huge subsidies for much longer.

Right now, carriers fall over themselves to sell the iPhone -- but they do it through gritted teeth. Sprint Nextel (NYSE: S  ) sacrificed profit margins to boost iPhone-powered sales. Ma Bell and Big Red dutifully slog through their iPhone inventories too, trying to ignore the pain.

"A logical conclusion is that the iPhone is not good for wireless carriers," concludes Mike McCormack, wireless analyst for Nomura. "The carrier-level value destruction is quite evident."

In Europe, where the networks don't do as much of Apple's heavy lifting, iPhone market shares often linger in single-digit territory. Sprint and friends must eventually run out of patience with Apple's profit-sapping pricing strategy. At that point, one of two things will happen:

  • Apple will lower its direct prices to the carrier.
  • iPhone sales will drop through the floor as consumers balk at the sticker shock.

Either way, Apple's salad days will be over. If the iPhone becomes expensive, there's no shortage of Android alternatives to choose from. The barriers to entry in the mobile market have also turned out to be surprisingly low; maybe the next big thing will come straight out of left field, like the original iPhone did.

By then, the company had better have its next market-breaking invention ready and it had better be an unqualified hit. If not, well, look out below.

None of this will materialize this week, of course. The worst that can happen here is that the iPad 3 leaves consumers cold, in which case phone sales will smooth things over for another quarter or two. Just remember these big, unavoidable issues when the big drop finally happens. I have a bearish CAPScall riding on that thesis and expect it to pay off in the next year or two. Check up on my all-star CAPS profile any time you like. That's the best way to hold me accountable for my market calls.

If you're looking for a way to play Apple without exposing yourself too directly to the risks above, you could invest in the components inside Apple's biggest sellers instead. We've got a free report, "3 Hidden Winners of the iPhone, iPad, and Android Revolution," which details three great stocks that are riding Apple's growth. To get your own copy of the report, just click here now -- it's totally free!

Fool contributor Anders Bylund owns shares of Google but holds no other position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+.

The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Google and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. We have a disclosure policy.


Read/Post Comments (47) | Recommend This Article (11)

Comments from our Foolish Readers

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  • Report this Comment On March 06, 2012, at 6:21 PM, gyndok1966 wrote:
  • Report this Comment On March 06, 2012, at 6:22 PM, gyndok1966 wrote:
  • Report this Comment On March 06, 2012, at 6:31 PM, GeorgeCarranza wrote:

    "That's really all Apple's iStuff is -- an enormous and very profitable fad. It's the Pet Rock of the new millennium." Really?... Really?

    Well, I guess time will tell. You've stated your position; and here's mine. AAPL is due for some sort of a consolidation/pullback, but it won't be tomorrow or Thursday. All the analysts/pundits who also have $700 price targets are also citing reent history, in that AAPL always pulls back after a product announcement. While that's true, it's also because of typically unrealistic expectations.

    The expectations for Weds. are low, and that sets up perfectly for me. While you're referring to AAPL's incredibly integrated user-friendly platform as "the Pet Rock of the new millennium", I'm buying June/July 600/650/700 calls. I'll check back with you this summer, my Swedish friend.

  • Report this Comment On March 06, 2012, at 6:42 PM, Randseed2 wrote:

    The underlying problem with AAPL is the problem it's always had since its inception: Closed development. Let me explain.

    It seems like a smart move for Apple to lock people into their platform universe, as it were. Unfortunately, that doesn't go over with a lot of the developers. I'm not going to go buy a Mac just so I can develop for the iPhone/iPad/iPod and very few other people will either. So the path of least resistance is to go develop for the Android.

    Apple has always "had the better stuff." The problem is that Apple has never gotten away from restricting people in what they can do with their stuff. Compared to competitors, their stuff is expensive, performs about as well as Windows does (but not compatible), and about as well as Linux does (but no brain required). So that leads one to believe that they're trying to do...what? Corner the UNIX market for UNIX users who need "easy to use" cutesy graphical interfaces?

    I have not owned AAPL. I think AAPL is due for a HUGE, MASSIVE crash.

  • Report this Comment On March 06, 2012, at 6:43 PM, Randseed2 wrote:

    (oops) So the point is that when I decide I want to write something, i* is out. So the medical software I'm writing? All for Android tablets and phones. Sorry.

  • Report this Comment On March 06, 2012, at 6:46 PM, smartin619 wrote:

    Apple currnetly trades at P/E very close to the market average. I don't think hyper growth is priced in.

  • Report this Comment On March 06, 2012, at 6:46 PM, ejclason2 wrote:

    "It's always tough to pin an end date on recent fads."

    The wisest words in this article. And yet you predict Apple will fall in the next year or 2.

  • Report this Comment On March 06, 2012, at 6:58 PM, applefan1 wrote:

    Randseed2, you are basing everything on what YOU are developing software for. Well, Apple has more apps on their OS than Android. The iphone issue is something funny. So Apple didn't release the iPhone 5 last year, they still had strong sales from iPhone 4S sales and they are just turning on Brazil and China. The iPhone 5 is supposed to come out later this year and there is a pent up demand for it.

    Apple hasn't released a hardware product in 2012 and they always have pent up demand. Each time a product comes out, there is tremendous amounts of sales within the first 6 months, and then it dwindles down just before the next release and this happens all of the time. But each time they release a new product, there is substantially more sales than the previous release and they are not only going after the desktop laptop model, which is partially made up of Windows switchers, new users, and previous owners, they are continually increasing market share and yearly sales. Ipad, they OWN that market and that potential is bigger than the cell phone market because various types of businesses will use them for specific purposes in addition to personal computing. New OS by Apple generates lots of revenue and they have two releases within the next 1 1/2.

    SInce the tablet market is just in it's infancy, that market will probably take at least 5 to 10 years for it to mature. The iphone market hasn't even come close to maturing yet. I give Apple about 5 to 10 years of yearly growth with some sell offs here and there.

    Apple has been blowing out their quarters and annuals sales and profit forecasts for over 10 years and it isn't showing any sign of slowing down.

  • Report this Comment On March 06, 2012, at 7:01 PM, pinks2000 wrote:

    1) Hypergrowth may in fact decrease to 50% year over year. This is a problem all the rest of the large tech companies would love to have. Their "miss" quarters are 50% growth or more.

    2) Apple computers never became a commodity like PC's. Will the iPhone? We will see. The high price you complain about may in fact slow down this process.

    3) The "cool" factor is just getting started well in China and in a lot of the world. The cool factor may evaporate in the USA but that is a small part of the whole picture.

    4) Too expensive. The buyers decide that and so far they are voting you wrong.

    Some day you will be correct, but you are a few years too early. Hold this article for 2014 or 2015 or later. We are due for a pullback though.

  • Report this Comment On March 06, 2012, at 7:03 PM, hiddenflem wrote:

    yawn. the apple hit pieces at the fool are by far one of the best indicators of an upcoming rise. right before the blowout earnings a few weeks back these kind of articles were posted every day here. it gets old.

  • Report this Comment On March 06, 2012, at 7:04 PM, applefan1 wrote:

    the only reason to dump apple is so that i can buy into it at a lower price point.

    People that underestimate Apple usually end up being faced with denial.

    I used to tell people to buy apple before Steve Jobs returned back to Apple.

    You guys just don't get Apple........

  • Report this Comment On March 06, 2012, at 7:07 PM, applefan1 wrote:

    There are always going to be profit takers which produces a drop, but then it does right back up.

    Fads usually only last a short period of time, but Apple isn't a fad, it is becoming the norm.

    Their stores are packed, even when it isn't Christmas.

  • Report this Comment On March 06, 2012, at 7:23 PM, oriorda wrote:

    Oh my. The world reels in shock horror. Randseed2 isn't going to develop an app for Apple.

    How will we ever get by?

    I've participated in the development of astonishing iPad apps related to the learning difficulties of autistic children. Medical students write to tell us that when they put the iPad in the hands of kids 'the magic begins'.

    My friend is a successful GP in Portland. She switched over to an iPad Patient Records Management suite recently and is reporting great feedback from her staff, fellow doctors and patients.

    Another friend is a world class radiologist who uses images sent from his hospital to his iPad to enable him to participate in conferences when he's not at work.

    On and on it goes. Somehow, and I know it's going to be a struggle, but I think we'll get by without Randseed2 just fine.

    And if he doesn't want to share in the $4 billion earned so far from iOS developers, that's just fine and dandy. If he prefers to deal with the fragmentation and security issues on Android, why, that's his choice.

  • Report this Comment On March 06, 2012, at 7:30 PM, oriorda wrote:

    It is indeed an interesting observation that ubiquity often leads to commoditization, such that if everyone has one, where's the cachet for you owning one too?

    But here's the thing: the more of your friends who have an iPhone or an iPad, the greater becomes your ability to share with them through iCloud integration. Facetime is just a small example, iMessage is another.

    Apple is a niche, exclusive, up-market brand that has gone mainstream. Nobody has ever done that before in any industry. It's far too early to see the end to this.

  • Report this Comment On March 06, 2012, at 8:10 PM, jeeprv5 wrote:

    How IRONIC.

    Apple has become the corporate giant they so strongly opposed in the 1984 Orwellian Commercial....

    But we already knew that!

  • Report this Comment On March 06, 2012, at 9:47 PM, rogercapital wrote:

    You are absolutely right . . . about a decade from now. . . until then, I suggest you not short apple stock, for your own mental and financial health.

    A dead clock will be right twice a day.

    Sarcastic comments aside, I think you fail to understand how Apple's ascent was due to their making a better product. People who don't get that think the popularity is a fad only, when in fact it is a fad with genuine and strong underlying foundation.

    Even though it sounds smart to be contrarian, I think your view that apple's stock will crash and not undergo a plateau followed by a stead decline (like microsoft) is ill informed.

    The comparison of apple to blackberry and palm is misleading, because Apple's foundation is in Mac OS and computers. It is much more appropriate to compare apple to microsoft, whose market share is more "sticky." Apple's control over its superior OS (for mac and iOS) will attract and retain users even in the face of stiff competition from Android and MSFT.

    If you are going to dispute the idea that iOS is superior, I suggest you first learn the difference between having more features vs better user experience before you claim that I don't know what I'm talking about.

    That argument aside, the point is that people won't turn their backs on Apple overnight, superior OS or not. Apple's earnings will first experience reduced growth or no growth, then gradually it will struggle to stay afloat, much as is the case with Microsoft today. If management does a decent job, Apple's decline will be forestalled or made more gradual. Then new competitors will come in and chip away at their market share, as is always the case in technology.

    Before that happens, the iPhone will continue to gain significant market share not just in the US, but China, where it is selling like hotcakes. Next, iPad will expand along with the tablet market, until that market stops growing or become saturated with iPads. Then the Mac will continue to grow, but at that point, other sources of growth will have been exhausted. Unless apple comes up with other game changers, that will be the end of apple's torrid growth. If apple's management does a halfway decent job of innovating, they will be able to keep competitors at bay for a few years. Eventually, a superior product by the next Steve Jobs will take over and the cycle starts again, but for the next Apple, whatever that company is or will be called.

    I think your story shows a willingness to be contrarian, which is always laudable. But you also show a lack or willingness to acknowledge the company’s short term growth prospects and its momentum in the consumer market place, which is fine, unless your are shorting their stock. But then again, if you are willing to hold that short position for a decade, I’m sure you’ll prove correct. But in the mean time, you might have a easier time making money with more vulnerable stocks, like RIMM.

  • Report this Comment On March 06, 2012, at 11:06 PM, rogercapital wrote:

    GeorgeCarranza

    While I'm bullish on apple's prospects for the next couple of years, I urge you to reconsider the 650 and 700 calls.

    Keep in mind that in order for you to make money on those calls, the price will have to rise significantly (sometimes) above the strike, which means you need a $720 price on expiration by July. That's not impossible, but difficult. Here's why:

    According to my projections, apple will likely double their earnings and hence price from end of 2011 to end of 2013. That's about 41% growth y/y, which is approximately consistence with historical record. At the end of 2011, their price was in the low $400's, which means their price by the end of 2013 would be high 800's.

    This will likely unfold not all at once, but quarter by quarter, as wall street analysis gradually adjust their estimates according to guidance and announcements.

    While it is possible that I'm overly conservative, there is also reason to think they may miss this target 1 quarter or so out of 7. If I'm correct, their price will likely not reach 700 by June of this year, unless Wall street assigns a higher P/E before June or drastically raise their earnings projections. Neither of these two will likely happen, unless there are catalysts in place, of which I'm not aware of. If you are aware of these catalysts, please share them with me: rxwang@yahoo.com.

    Unless you have info that justifies a case for a rapid appreciation of share prices after this almost parabolic rise in the last couple of months, I suggest you stay more conservative and buy the near the money calls, given there is very much the possibility of a short term correct due to heightened expectations. You'll still be leveraged and expand your investment, but have much less risk of losing your principle.

    Good luck, but be careful with those far out of the money and short expiration calls, even if is with AAPL.

  • Report this Comment On March 07, 2012, at 9:28 AM, GordonsGecko wrote:

    Reason #5 - You hate making more money.

  • Report this Comment On March 07, 2012, at 12:50 PM, TMFZahrim wrote:

    @oriorda, there are plenty of cross-platform alternatives to, say, Facetime or iMessage: Skype, Yahoo Instant Messenger, AIM, Google Talk, that new talk and messaging tool from Vonage, the list goes on and on. Some of these work on any platform, not just a single OS family like Apple's stuff. If iGadgets ever fall out of favor, those communication tools will be replaced and then forgotten in no time flat. Facetime's only advantage today is being preinstalled on iPhones etc.

    Remind you of the browser wars any? It does to me. The difference is, Apple is starting from a hotly contested slice of market share while Windows never had any real challengers. When the iPhone becomes so common that it's uncool, the whole house of cards falls.

    Apple's huge profits rest on an unsustainable business model (cf the section about carrier subsidies if you please). One iceberg took down the unsinkable Titanic 100 years ago; it won't take much to sink Apple today.

    Anders

  • Report this Comment On March 07, 2012, at 1:30 PM, TheDumbMoney wrote:

    I think Anders makes good points.

    The alternative view is that in the iPhone and iPad, the mobile computer has largely reached its ideal or Platonic form.

    The idea of an ideal product form is anathema to many who focus on innovation. (Rightly so.) But it nevertheless surely exists. When was the last time cereal boxes changed dramatically? Or soda cans (the wider drinking whole, wow)? Or desktop computers? Or staplers? Or scissors?

    If the mobile device has reached its ideal form (big enough for the phone still to fit in your hand, large touch screen), there is not going to be another "crackberry" type shift. Instead, all makers will try to make their devices essentially look like iPhones. As they are doing. And will continue to do (with some exceptions like the slip-top Droid 3 that also has a touch keboard under that slip-top).

    So that leads the mind to thoughts of commoditization. The way to stop commoditization is with brand. Here the snake eats its head. If you think that people will switch to "something new" then maybe Apple's brand is worse less than you think. But if you think that the iPhone is essentially the end-of-the-line for major innovation in this entire product category, and that all that remains, even for Apple, is nibbling at the edges of perfection, then Apple's brand looks much, much stronger.

    That said, margin compression is inevitable, as more products gain similar capabilities and looks, and as prices naturally come down because of ubiquity. But I think the market already pretty much expects a lot of such compression, which is one reason why Apple trades at a lower multiple than Google trades at. If so, where is the bubble there? Apple trades basically like it is Johnson & Johnson or Exxon or MMM anyway, so what's the big whoop?

    Under such a scenario, iPad sales (which are NOT as heavily subsidized -- so scratch out that part of Anders' thesis as to them, and which, even more than iPhones, are the major growth story at this time) will drive the stock higher. I have a Kindle Fire and I do not think tablets are a fad. And I think it is possible that they similarly are an ideal form (the counter-argument is that a true ideal is a larger laptop that is separable into a true component tablet form, accomplished by having a ARM processors located behind the screen, rather under the keyboard, which is certainly possible). And beyond the iPad, that leaves at least one avenue for potential future growth, in TVs.

    If my view of Apple is correct (CAPS score sub-50 alert), what is likely to destroy the iPhone or iPad is not some new innovation along their lines. Rather, the next big thing is more likely to be something entirely different, that cripples these forms, just as the iPad has crippled standard laptops. My pick would something like Google's 3G sunglasses, or some sort of implanted, truly-Android-like device. But how far off do we think such a thing is to true ubiquity? Certainly more than two quarters. Certainly more than two years. Probably much, much longer.

    It could be that my lack of imagination limits me. But it could be that in Anders' drive to envision the next big thing, he fails to recognize that Platonic ideals for products do exist, at least in the short term, which is much longer than the next few quarters.

    All best,

    DTAF

  • Report this Comment On March 07, 2012, at 4:44 PM, jdwelch62 wrote:

    @rogercapital: Not to go too far off-topic, but you stated the following above: " Apple's earnings will first experience reduced growth or no growth, then gradually it will struggle to stay afloat, much as is the case with Microsoft today."

    Umm, in case you hadn't noticed, Micrsoft isn't exactly "struggling to stay afloat". They're doing just fine; in fact, their cash flow is the best it's ever been (or close to it). Here's a link to a 24/7 Wall St. article, which lists MSFT as the #1 holder of "pure" cash (not securities, but cold, hard cash), and the reason they're generating so much of it:

    http://247wallst.com/2012/03/06/how-americas-richest-compani...

    I know it's fashionable to bash MSFT as being "stagnant", but they're still relevant. True, they're not Apple, but then, they never have been. But they're not stuggling, either...

    Fool on!... :-)

  • Report this Comment On March 10, 2012, at 12:52 AM, CascadeHead wrote:

    OMG, this stupid b@stard is still writing about shorting Apple? It's up like $200 since he's been saying that. Idiot!

  • Report this Comment On March 10, 2012, at 4:32 AM, bufik wrote:

    I love Apple, though being not a religious fan... but it is more then obvious that a short term correction has to occur. New iPad....everything expected, basically if you buy it early the only new "feature" will be hires display. With current apps it will only remap 1 pixel to 4. 2048x 1532 = 2x (1024 x 768). LTE networks not actually ready in most parts of the globe. So the arguments of Cascadehead are ony pointing to the history ("it was only growing in the past").....but everything in the world has inevitably to end or stop for a while....short term apple shorting seems like a good idea to me....especially in synergy with current tops on indexes, Greek "solution" , PIIGS, Iran, ...already Portugal is starting to have some buzz.

  • Report this Comment On March 10, 2012, at 4:46 AM, bufik wrote:

    .....and one more thing why iPad is not a slolution for people like me. I am quite often on the holidays (snowboarding in winter, kitesurfing everytime else)...yet I cannot substitute my notebook with iPad....cannot read on the sun, office application and file system missing, even iPad version of my broker´s app (TWS from IB) is very poor against PC or Mac versions.....i would like to buy new iPad (my wife already ownd iPad 2)....but playing Angry birds in the lobby when the wind is down...well, I will wait a not buy now. I think there are many people with similar reasons like me.

  • Report this Comment On March 10, 2012, at 5:06 AM, Risky88 wrote:

    Just to think

    GM was making record profits in the 80's and

    looked unstoppable

    took a very long time

    but it did fall

    like many other have

  • Report this Comment On March 10, 2012, at 8:10 AM, totalFoolishness wrote:

    One of the things that keeps being mentioned is the inevitable fall of Apple. I just want to point out that in most of the cases the companies mentioned failed to continue to provide the experience that customers were used to or got used to (GM, come on really? No one looked at them in the late 90s and thought "Innovation"). Apples is currently on the top of innovation, or what probably matters more is that for consumers they see Apple as being at the top.

    We can argue all day long using white sheets, technical specifications, etc but ultimately the millions of people that enter an apple store make their decision based on a lot of factors, and apple seems to be addressing those factors better than anyone, right now. This is the key because we dont know what will happen in the next few years, but at least for now the overall consumer picture is leaning healthy in their direction and picking up momentum. Apple is doing better in just their laptop/desktop than any other major computer supplier. Why? Well some of it is because they have a lower market share and through their eco-system are selling people on getting into it further via a computer. Some of it is quality. Some of it is just a fad - who knows how long sitting at a starbucks table with an aluminum laptop with a big fruit on the front will be seen as trendy.

    The truth is though that right now they are still trendy, they are still desired, they are still the product to have in two major categories (tablet and phone) and arguably a third (laptop). Will this still be the same in 5 years? It will if they continue to demonstrate unwavering quality, innovation, and customer service - in my opinion. If they fail to do this then the last 3 years will be seen as a fad.

    The problem is with the bear argument which was articulated above is that this company is priced right now for about 15 - 20% growth. A recent deal with another Chinese mobile provider just opened up another 300 million or so customers that now have access to an iphone. I live in Turkey currently and people here drool over an iphone eventhough it is not affordable for most people because cell companies dont subsidize like in the states. This creates somewhat of a Coach Bag type atmosphere here which im sure is duplicated in other places. This has certainly been a model of business that has worked for Coach and other producers of coveted goods. Markets like this wont work like the US but that does not mean that Apple can't capitalize on opportunities.

    People want their products, right now at a fever pitch. Until that changes I don't see how you can make a bear argument. If Apple was trading at 40 - 50 times earnings I wouldnt of written this comment, but the fact is they are not, they are trading at about 15.5 TTM earnings and 13 on forward look for fiscal 2012.

    I think you guys are crazy and personally I would love to see not a caps call but you putting real money in shorting this company. Otherwise you are just playing at investing and have no real stake in what you say.

    Chris

    Long AAPL

  • Report this Comment On March 10, 2012, at 9:21 AM, Randseed2 wrote:

    It never ceases to amaze me how people can take comments out of context and try (and fail) to shoot off witty insults.

    What you need to do is to compare Android, the fairly new arrival, with iOS.

    1. iOS is more mature because it's older than Android.

    2. iOS has more applications because it's older than Android.

    3. iOS is a closed development environment. Android is not.

    4. Apple has deliberately restricted development on iOS to one host platform, which makes little sense anyway. Android has not.

    5. Android has an accessible filesystem without rooting the device. iOS does not.

    6. Android devices can be used as USB drives, etc.. iOS cannot.

    7. The advantage of "putting an iPad into the hands of a child" is the interface more than anything else. Apple does not have a corner on that market.

    I have traded AAPL, but I haven't invested in it. That's simply because I think that they're going to get some major competition fairly soon. Is that going to crash Apple? Probably not. What it will probably do is make the stock less attractive. I don't see that changing in the immediate future, but we're talking about investing here, not short to mid term trading.

    That having been said, currently Apple is probably a decent investment. In fact, it's probably a good investment. It's trading at 15.5 P/E, while the industry in general is at about 21. GOOG is trading at 20.20 P/E. RIGHT NOW, it is a very good investment.

    I just don't think it's going to last for more than a couple of years more.

    My point, which some so nicely took out of context, isn't that the world is going to end because I'm not going to develop for iOS. Obviously what I meant is that with Android becoming a big contender, developers are faced with this choice:

    I have two platforms with roughly equivalent functionality. I have to go buy a couple thousand dollars of hardware to buy a Macintosh so I can develop for iOS. On the other hand, if I want I can develop for Android on virtually anything, don't have to deal with Apple's AppStore and their terms of use, and don't have to fork out cash for new hardware for no good reason.

  • Report this Comment On March 10, 2012, at 9:22 AM, Randseed2 wrote:

    And, yes, I should not have said "huge, massive crash" without clarifying what exactly I meant. Understandably, it was interpreted as "AAPL is going to go from 540 to 250 overnight," when I was doing what I despise government budgeteers doing and was talking about rate of growth.

  • Report this Comment On March 10, 2012, at 1:36 PM, bufik wrote:

    Randseed2

    P/E ....well, yeah, you are right in current numbers...BUT compare IBM, Oracle, Microsoft to Apple....they are not cool anymore, there is no hype around them and they have great diversification of product and services....Apple is Mac, ipod, ipad and iphone. Consumer electronics, fashion, no roots in corporate business. Can you imagine how fast can their growth stop? Google and MSFT are not sleeping by the way....nothing against Apple, I love Apple devices, use them, but...strongest and most stable company ever ?? ;-)

  • Report this Comment On March 10, 2012, at 1:40 PM, bufik wrote:

    .... maybe it is because that for americans : retail is almost everything...because us citizens are still biggest consumers of the world...but this prspective has to be adjusted for the whole globe..and then for Apple as well.

  • Report this Comment On March 10, 2012, at 1:53 PM, NeeniH wrote:

    I'm getting whip lash from the conflicting advice. A couple of weeks ago Aapl was re-evaluated at a $600 plus price target. It still as the the Apple TV product launching, still has iPhone 5 launching, still has the cash, still as the desirable P/E ratio....are we throwing that all out the window???

  • Report this Comment On March 10, 2012, at 2:26 PM, HiramWalker wrote:

    Anders,

    You have been pushing GOOG over AAPL for a long time now, with these same kind of reasons for at least the last 2 years. At some point you have to accept your reasons are weak and you are ignoring important pro-Apple factors. If you had been holding Apple instead you would be doing very well.

  • Report this Comment On March 10, 2012, at 4:17 PM, bufik wrote:

    HiramWalker

    yes, maybe...but nothing lasts forever...thank you all..i am even more confident to take more short positions on AAPL...But facts: Apple is only about user interface and thats Steve Jobs´ heritage....try to imagine less hype a consumer confidence and try to imagine recurent margins that companies like MSFT, ORCL, IBM do have. /service and maintance contracts, sw upgrades/,......is it a case of AAPL?....not, for sure.

  • Report this Comment On March 10, 2012, at 4:25 PM, bufik wrote:

    and sorry formy clumsy English..I am not an english native speaker.

  • Report this Comment On March 10, 2012, at 4:38 PM, bufik wrote:

    and btw...forward P/E is counted, if company results may contain a little dissapoitment then....big correction could be seen....

  • Report this Comment On March 10, 2012, at 4:54 PM, DocMonsta wrote:

    Earth-shattering analysis. Consumer trends will change through time...wow!

    The bear arguments against Apple have been rehashed for the last 10 years and have thus far proven wrong. But of course, sooner or later, one of these bears will be right. More likely later, than sooner, though.

    Agree with the sentiment above: Put some real money on the table against Apple. And keep us posted on how that is working out for you. 1-2 years is a very short window to be short this company.

  • Report this Comment On March 10, 2012, at 5:13 PM, bufik wrote:

    Maybe there is a problem that we are discussing nonsense. I am not long term investor, what an ugly creature..! Then sorry, still my opinion is : short Aplle for short term, if Apple will have success signs in corporate sector ..then go long with AAPL...but go long for years is not my cup of tea... hey americans you have nice censorship, they did not allow me a word starting with bull...funny..or sad maybe....

  • Report this Comment On March 10, 2012, at 5:18 PM, bufik wrote:

    And be honest all you that had sworn on IBM, then Microsoft , then on Google....you are swearing now on Apple....good luck ! :-)

  • Report this Comment On March 10, 2012, at 5:19 PM, bufik wrote:

    all of you..sorry

  • Report this Comment On March 10, 2012, at 5:27 PM, bufik wrote:

    and if you are that creative nice leftist people, which "think different"...then remember that your ipad is being assembled by a sleve working for ....?? well do you know ?

  • Report this Comment On March 10, 2012, at 5:38 PM, bufik wrote:

    and what is really nice on Apple ...there will be no short squeeze..it will be ave ry nice fall....

  • Report this Comment On March 10, 2012, at 5:44 PM, PeterDylan wrote:

    The sky is falling, the sky is falling!!! "Look out below!" Really? That's the best you got? It can't last forever just because it can't last forever?

    Apple products work and consumers love them. Oh yeah, and the company makes money, much more that you can say for HPQ or AMZN!

    Just keeping it real...

  • Report this Comment On March 10, 2012, at 6:01 PM, bufik wrote:

    Peterdylan

    May you live forever....;-)

    http://www.youtube.com/watch?v=ACwOU1Nkrys

  • Report this Comment On March 10, 2012, at 6:05 PM, bufik wrote:

    i am keeping it real....all the time consumers, consumers, consumers....kind of 100% us thinking huh ? ..ok..and what will happen when consumers turn?? they do it much faster than corporations.....

  • Report this Comment On March 12, 2012, at 2:23 AM, mphillip29 wrote:

    I have seen a couple of people making the same mistake when comparing a Windows PC and a Mac. I am a LAN Administrator and deal with only Windows PC's at work. I currently own an Apple iMac and a Macbook Pro at home. I can tell you that you get what you pay for. Sure the Windows PC may have better hardware, but the operating system that they use to drive the hardware is not reliable. The person that developed the registry for Windows did a horrible job. When I remove a program from my computer than it should be gone. That is not the case with Windows. You will often find traces of that program in the registry. This is why people start seeing massive slowdowns in their computer performance over time. I bought my Mac in 2009. I have never had any problems with it other than some of the things that were fixed by Apple in firmware updates within a short period of time. I will continue to support Windows at work but I have realized the capabilities and the reliability of Apple products.

  • Report this Comment On March 13, 2012, at 7:35 AM, Wesss wrote:

    A year or so ago I noticed a bunch of oddly negative Apple articles as we were all making tons of profit and enjoying some really nice products, as well.

    GradualIy I noticed all the articles came from this same guy- Anders Bylund.

    Today this negative AAPL headline happened to catch my eye, and look who it is again!

    Hadn't heard much from him as AAPL's success made all his earlier opinion's look bad. But now he's back when it seems a bit safer.

    I repeat the point I made last time: I pay for good professional advice and logical, healthy debates here at TMF. This guy just rags on AAPL for unknown reasons and provides illogical, unprofessional advice and shouldn't be writing for TMF.

  • Report this Comment On May 29, 2012, at 4:06 PM, motocross333 wrote:

    i am not agreeing with this at all, think what you want. Apple is a GREAT investment right now. Remember this when at the end of this year Apple is at $800 per share..

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