Mueller writes, “The analyst apparently believes outcome 1 would raise Apple’s share price by approximately $35 (a terribly erroneous belief in my opinion, as I’ll explain further below), while outcome 2 (described as ‘considerably less likely’ in the article) would offer an ‘enormous’ payoff since Apple could capture, for example, ’25% of the future anticipated Android market,’ in which case its share price could grow by roughly $260 per share.”
“If Apple had to settle for a mere $10-per-device royalty without any further effect on competitiveness that would result from restrictions on features and/or distribution, investors should give serious consideration (after a full analysis of all of the relevant issues and factors) to shortselling Apple’s stock. Why? Because this would open the floodgates to Apple going once again through what it experienced in the 1990s: commoditization,” Mueller writes. “$10 per device is nowhere near the royalty level that offsets the continuing erosion of Apple’s market share.”
Much more in the full article – recommended – here.
MacDailyNews Take: The only option is to go thermonuclear. We love the smell of fallout in the morning.
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