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Oh, the silly things I worry about sometimes.
Apple (Nasdaq: AAPL ) just launched the iPhone 5. The handset isn't all that different from last year's iPhone 4S, but it's not just a handful of new software features wrapped around a faster processor, either. The screen is bigger and supposedly more colorful, this is the first iPhone to connect to high-speed 4G LTE networks, and Cupertino even put some effort into improving call quality.
So yeah, this is without a doubt the best phone that Apple ever produced, and it surely deserves breaking sales records. Early reports say that Verizon (NYSE: VZ ) and AT&T (NYSE: T ) exhausted their pre-order reserves in a matter of hours, so trying to order one right now is kind of like craving Springsteen tickets in Sweden. (The Boss always sold out every show before I could get my hands on a ticket.)
So what's wrong, then?
Sales reports show that iPhone and Android handsets own a combined 86% market share in America nowadays. Both platforms are growing, and they steal customers from Nokia (NYSE: NOK ) and Research In Motion (Nasdaq: RIMM ) all the time.
RIM's BlackBerry phones were leaders in the early days of mobile computing, facing off against now-defunct rivals such as Palm and the immature Windows CE 6.5. Life was good for a while; at one time, RIM owned the largest market cap on the Canadian stock exchange. That peak reminds me of Apple's current status as the biggest equity in the world.
And the bigger they are, the harder they fall. BlackBerry missed a turn or two, started losing market share to Apple and Android, and is now fighting for its life. Shareholders who bought in at the top have lost about 95% of their investment.
History does not repeat itself, but it does rhyme
That former giant was not immune to changing consumer preferences and made things worse by not adjusting to the new demands quickly enough. Apple may be walking down the same well-trodden path toward utter disaster.
I mean, it's been two years since Apple introduced the basic design that's still in use with the iPhone 5. Come next summer, that look and feel will have three years of beard hanging from its chin. The iOS software is much the same as it was in the very first iPhone, five years ago. A light dusting of new features doesn't outshine the lack of innovation.
How long can Apple keep singing the same old song at a slightly different pitch, before a rival stumbles over a new, fresh, and seriously exciting killer feature?
When that happens, I wouldn't be surprised to see Cupertino resting on its considerable laurels until it's far too late.
Too big to fail?
Oh, the stock isn't going to zero, unlike some other smartphone players I could mention -- Apple's bank account is flush enough to keep the company alive for decades even if the business model falls apart. But Apple could very easily become just another also-ran in a very crowded field.
Nowadays, RIM hangs its shrinking hat on two hopes: that the upcoming BlackBerry 10 software will save its bacon, and that low-cost, low-margin BlackBerrys can keep the party going in emerging markets as smartphones replace basic feature phones. A radical redesign could make a difference, but Nokia already showed us what happens to those who depend on high growth in profit-free markets. It's not a pretty picture.
So when Apple hits a glass ceiling in high-end markets like North America and Europe, I wouldn't put much hope in having lower-end markets save the day. Apple was never built to work that way.
Enjoy the iPhone 5 sales bonanza, Cupertino. I'm afraid it'll be your last hurrah in the smartphone market. Can the iPad make up the difference when the iPhone becomes old hat? Don't bet your house on it.
Take action, dear Fool
These are just some of the reasons I have a thumbs-down CAPScall on Apple. In short, I don't see a company that was built to last.
I'm admittedly kind of alone in Fooldom here: Apple is an active recommendation of five different investment Foolish services. But I don't write these articles to get invited to parties. It's not healthy to ignore warning signs just because everyone else is bullish. Raise a glass to the "motley" side of Fooldom.
If you want to see Apple drawn in a much brighter light, you should grab our premium research report on the company. In it, you'll find a much more bullish view of Cupertino. The report has already sprouted a deeper dive into the iPhone 5, and comes with a full year of timely updates to boot. Go ahead and consider the opposite view -- you won't hurt my feelings one bit.