MacDailyNews Note: Make that three new highs. Moritz shat this one out before Apple posted all-time closing and intraday highs today.
Moritz continues, “In fact, Apple has been on a winning streak for the past decade, ever since its audacious co-founder Steve Jobs reclaimed the top post. Apple’s long ride atop the pinnacle of cool has a can’t-miss quality to it; a gravity-defying feel of permanence.”
“But beware of the backlash… It’s inevitable. The life cycle of tech giants is brilliant and brutally short. Today’s consumer electronics leaders are tomorrow’s fossils,” Moritz writes. “In the 1970s, Atari was considered infallible, bringing video games out of the arcade and into the home with joysticks and consoles. But by the 80s, rivals Sega and Nintendo got the hot hand, and Atari was deemed uncool. Cool is the whipped confection that Jobs has built the Apple kingdom on, but even the sweetest empires fall.”
Moritz writes,” Apple shares have had a tremendous run, and here are four reasons to sell the stock and bank your gains.”
• Macs: Thanks to a more stable Windows 7 operating system that borrows some good looks from Apple, PCs aren’t so bad anymore. The rush to convert to Macs has quieted down thanks in part to a bevy of improved PCs… Apple’s market share slipped slightly in the fourth quarter to 7.5% from the 7.7% level it held in the year-ago period, according to Gartner. A big hurdle to Apple’s mass market success is its incompatibility with PC software, but an even bigger barrier is the shocking contrast in prices. You can buy two PCs for the price of one Mac.
MacDailyNews Take: Not factually based as Mac unit sales continue to hit all-time records while maintaining *gasp* healthy margins. (Sell all the low-, no-, and negative-margin netbooks you want, PC box assemblers. Have fun in bankruptcy court.) Market share as Moritz is using it is meaningless. Macs can slum it with Windows at any time and thereby are the world’s most compatible personal computers; Macs run the world’s largest software library. Therefore, Macs are fully compatible with “PC software.” Again, Mac unit sales continue to hit all-time records despite the sticker price discrepancy. Given the record Mac sales that Apple is currently posting, it would seem that more and more people are learning how to correctly assess total cost of ownership and the full value equation before wasting their money on yet another piece of junk Windows PC.
• iPhone: Apple’s 4th version of the iPhone… is due this summer, and it’s not likely to be any different than the past three… Apple says it has sold 40 million iPhones and analysts estimate the company enjoys lavish 58% gross margins on the device. In comparison, Research In Motion(RIMM) sees 43% margin on its BlackBerries. The iPhone is a lucrative franchise for Apple and its strongest growth engine. But without a new market — like the one Verizon would open up — or a striking redesign, holding these peak levels will be a challenge.
MacDailyNews Take: Again, with no mention of the tremendous headroom that the smartphone market enjoys, the phrase “holding these peak levels will be a challenge” is meaningless, not to mention wrong. 40 million iPhones in a drop in the bucket compared to how many potential smartphone sales exist. There are plenty of new markets (and potential customer in existing markets) for iPhone to grow even without bringing iPhone to Verizon in the U.S.; a large market to be sure, but not the only large market in the world.
• iPad: After working on its highly-anticipated tablet device for three years (or more), Apple unveiled an expensive e-reader… The iPad is both an oversized iPod Touch [sic] and an under-powered netbook.
MacDailyNews Take: One of Scott’s four reasons to sell AAPL is his inability to understand what iPad is and how it will not only change multiple industries, but also positively affect Apple’s bottom line? Uh, okay. Oh, yeah: iCal’ed.
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MacDailyNews Take: After promising us four reasons, Mortiz only gives us three. We kid you not. If Slipshod isn’t, it should be Scott’s middle name.
Moritz writes, “Apple thrived during the downturn on the strength of a great Mac and iPhone product cycle, earning its 145% stock appreciation last year. Today, with the stock around $200, Apple sits at a lofty market value of $189 billion, 57% more than PC giant Hewlett-Packard. Investors like to call the stock’s premium valuation ‘the Apple tax.’ It might be time for your refund.”
Full article here.
MacDailyNews Take: We have no idea whether Apple’s stock will continue its current run or not, but if it pulls back, it won’t be for any of the silly, wrongheaded, and factually bereft reasons Moritz scribbles about above.
Imagine the spawn of John Dvorak and Rob Enderle: Bald and brain damaged, chained out of sight to a chair in the cellar. One day, what used to pass for a portly boy in the U.S. shows up with a Baby Ruth candy bar that he tries to share with the poor creature. Alas, his attempted candy toss falls just short of the pitiful thing‘s reach. The enraged Dvorakerle rips off his chains, swallows the chocolate bar whole, and escapes into underground caves — only to one day land a job at TheStreet.com.
[Thanks to MacDailyNews Reader "Hayward T." for the heads up.]
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