Should You Wait Before Jumping Onboard the iPhone 5 Train?

Whew! With all the talk leading up to the release of Apple's (Nasdaq: AAPL  ) iPhone 5, it felt like the buildup to the "Who shot J.R.?" extravaganza. For investors, though, all the smartphone hype has led to a quandary of sorts.

As Fools around the globe are aware, a sound investment strategy requires in-depth analysis and a long-term perspective. Thing is, the lead-in to the iPhone 5 unveiling led to what turned out to be a fairly decent pop in Apple share prices the past month. So what's an investor to do now?

The momentum builds
Predicting iPhone 5 sales is hardly an exact science. But if the Street is anywhere close, Apple could see as many as 23 million of the new phones flying off the shelves this quarter. If you ask Piper Jaffray analysts, the 23 million figure may actually be on the low end of projections.

Assuming Apple is able to avoid supply issues, Piper Jaffray believes sales of 6 million to 10 million iPhone 5s in the final week of September alone is likely.

Those are amazing numbers to say the least, but hardly impossible. In fact, if the past month's 6% run-up in stock price is any indication, investors expect those kinds of results.

Risks
Nokia's (NYSE: NOK  ) attempt to put a dent in Apple's iPhone 5 announcement with the introduction of its new Lumia 920 running Microsoft's (Nasdaq: MSFT  ) Windows 8 OS was an abject failure. Nokia was never going to seriously threaten Apple, of course. But it had a chance to at least make some waves at last week's Nokia World Event. Turns out Nokia dropped the ball by providing analysts and industry insiders with little, if anything, tangible.

The more legitimate risk -- as is always the case with such lofty expectations -- is a backlash should the iPhone 5 underwhelm consumers. The initial iPhone 5 sales will be there -- there's no stopping that train, even if it were warranted. But as the saying goes, the higher you fly, the farther you fall.

What to do?
If your investment objective is to add a growth-oriented industry stalwart to your portfolio (the 1.61% dividend yield is a little icing on a tasty cake), Apple remains a sound long-term option. Period. What happened today -- good or bad -- should have little bearing on your decision.

Why? Because making long-term investment decisions based on the "release of the century" is best left to day traders and short-term market-timers.

Want an in-depth look at all things Apple? Motley Fool analysts have published a premium report outlining the bull and bear cases for the tech giant. As an added bonus, subscribers to this premium report get a year's worth of updates -- at no extra cost! Sign up now to learn everything there is to know about the Cupertino Colossus.

Fool contributor Tim Brugger currently holds no securities positions, including any mentioned in this article. The Motley Fool owns shares of Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of Microsoft and Apple and creating a synthetic covered call position in Microsoft and a bull call spread position in Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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  • Report this Comment On September 13, 2012, at 3:54 AM, Compradore wrote:

    Why would I buy a premium report from someone that called Nokia/MS Lumia release "abject failure"? It wasn't polished that's for sure, but hard to argue against the specs of the phone, which stand up pretty well or outdo Iphone5.

  • Report this Comment On September 13, 2012, at 5:30 AM, SuntanIronMan wrote:

    I'm actually somewhat excited (somewhat) for Nokia's recently revealed phone offerings. I would be more excited if Microsoft had the operating system ready for prime time events (which is why tripped at the beginning of the race, Microsoft wasn't ready). The hardware side of the equation is in place. It is up to Microsoft to wow us with the software-side. Nokia has always had good hardware. It is the software that's been the problems.

    I have an iPhone 4S (and had the 4 and 3GS before it). I'm pretty sure I'm going to skip this iPhone upgrade cycle. I wasn't wowed with what I saw (granted, I wasn't expecting to be wowed, but still). I'll probably skip over everybody phone this upgrade cycle, not just Apple's. I'll likely hold onto my 4S for another year. But Nokia has me at least contemplating their phones offerings.

    That's just the technology fan in my talking (since I'm NOT currently an investor in Apple, Google, Microsoft, Nokia or anybody else in this space). Just as a fan of technology, I really liked what I saw with Nokia's hardware. The question is about Microsoft's software.

  • Report this Comment On September 13, 2012, at 9:49 AM, Krankor wrote:

    Where's the iPhone 5 beef?

    The iPhone 5 has no more to recommend it to potentials buyers than the Samsung Galaxy S III or the newly-introduced Nokia Lumia 920. Just check out any of the charts showing a side-by-side comparison. You'll see that Apple is basically playing "catch up" with other manufacturers' phones. LTE....been there, done that with other phones. Panorama pictures...been there, done that with other phones. The list goes on and on.

    So it has a "larger" screen...Good luck with that. It is still smaller than either of the other two phones mentioned above, so typing with the on-screen keyboard will stilll be more challenging (unless you intend to turn your whole phone experience over to Siri to try to decipher your request). And you'll still have to squint more to see web pages and other content on that smaller screen, despite the higher resolution display (which still doesn't match the Lumia 920 Nokia just released).

    And congratulations!!!! You now have to deal with yet another Apple proprietary cable to connect the phone, with a connector that is yet another non-industry-standard plug that renders all your existing iPhone accessories unusable without some stupid adapter you'll have to buy from Apple as well. Why is it that Apple products seem to always require a proprietary non-standard cable? Where are all the whizz-bang new features that justify making you buy cables that only work with Apple products? At least they didn't change your headphone plug...WOW! What a relief!!

    So go ahead, sheep!! Stand in line to get this latest over-priced bling from Apple that only brings you up to date with the rest of the cell phone world. I won't be losing any sleep over this latest over-hyped attempt to convince me that Apple's vision of the future is where I want to be.

    My contract with Sprint is done, so I'm thinking of moving to a new WIndows 8 Phone in November, probably the Nokia Lumia 920, a solid phone with solid apps.

  • Report this Comment On September 13, 2012, at 10:54 AM, gcp3rd wrote:

    Well, coming from a sheep new to the flock, in fact, not in the flock yet, I'll give perhaps a different perspective. I'm typing this post on my Apple G5 tower I bought in 2004. How many of you are reading this post on a computer from 2004 or older? Probably only Apple computer owners. Last night I was trying in vain to surf the web on my Dell laptop from 2006 (yes it's people like my wife and I causing the economy harm that are saving money instead of spending it). A few days ago my Windows desktop computer I use at my office, only 9 months old, went in to a hard crash requiring a power button reset. It gives error messages and bugs out almost daily and I'm not running anything fancy on it. My perception of the difference in the choices in computing is profound.

    Ok - computers are not mobile and vice versa. My wife and I have never owned an iPhone, but as she's on a flip phone (you are laughing at us now) I'm going to get her an iPhone to see how we like. If it goes well I may upgrade a 2+ year old HTC on Android. But my expectation is the iPhone will just WORK SO MUCH BETTER than anything else out there as that has been the case with Apple products for over a decade.

    You are right about pricing, the similarity in features, but from an investment perspective they have been building and tweaking a brand for a long time - way before I heard of Nokia. And I won't even use Bing because of my ongoing negative experiences with Windows products. So the sheep are flocking to the latest iPhone partly for legitimate user experience reasons and partly because Apple is reaping the seeds it has sown long ago.

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