“Buried within the recent quarterly report from AT&T is a subtle hint at what could haunt Apple going forward,” Thomas H. Kee Jr., president and CEO of Stock Traders Daily, scribbles for MarketWatch.
“Not more than a couple short months ago I recommended to investors that they sell Apple. That call was early, I did not anticipate the euphoria that overwhelmed the stock for the past couple of months, but the premise for my recommendation has not changed and the subtle hints embedded in earnings report help to reveal the pressures I see at Apple going forward,” Kee blathers. “First, although I recommended that investors sell Apple too early, no one lost any money, but if you sold you did miss the euphoric spike. The question on everyone’s mind now is if that euphoria was warranted. In my opinion it was not, but investors who were looking for a quick buck on the tail end of that market rally couldn’t find a better place to put their money. Yes, Apple also has excellent products, a good track record, and every money manager wants its sizzle in his portfolio, at least they did until recently.”
MacDailyNews Take: Translation: I totally blew it, but listen to me anyway.
Kee continues, “Underlying problems at Apple is a competitive environment that has caught up to it… Without a doubt, Apple led the way, and they deserve the reward of being first to market with these innovations, but technology catches up fast, and unless Apple continues to innovate at the same pace it did before, it will not stand out from the crowd on a technological basis for long. In fact, my argument is that competing technologies are in some ways already surpassing where Apple is today.”
MacDailyNews Take: Translation: I have no clue whatsoever, but listen to me anyway.
Kee continues, “Obviously, carriers should offer Apple’s products to their customers, but if Apples products no longer directly influence new subscriber growth like they did before, as is the case with AT&T now, eventually the margins come back into focus.”
MacDailyNews Take: Focus on this, Mr. Kee: 78% of all smartphones sold by AT&T last quarter were Apple iPhones and — newsflash! — the U.S. smartphone market isn’t the global smartphone market, either.
Kee continues, “Already today when you walk into a wireless carrier the Apple products are tucked away far in the corner. Competing products are front and center, with large banners, for all customers to see. These carriers are promoting upgrades to competing products because the margins are much better than with Apple products.”
MacDailyNews Take: Okay, we’ll all remember that retailers will try to sell us their most-profitable items, even over higher quality items that are not not only proven to satisfy their customers more, but are also proven to reduce churn to historic lows. Thanks for the insight. Despite “large banners,” 8 out of 10 of AT&T Mobility’s customers bought Apple iPhones anyway, regardless of the derviative crap that spiff-hungry salesclerks first tried to shackle them into. Nobody puts Baby in a corner.
Kee continues, “The competition has caught up, maybe even surpassed, and unless Apple takes definitive action to excel ahead of the curve again I do not believe that the company will continue to be what we have known it to be for years… Is AAPL innovative enough now to warrant an investment at these levels? What happens if the market does not embrace one of their new products in the future? It is only a matter of time in my opinion, and I believe that short positions from near $600 will return more than what we missed by selling too early a couple short months ago.”
Read piece here.
MacDailyNews Take: This morning, Apple (AAPL) is currently up $55.97, or 10%, to $616.25 and Mr. Kee’s article has been iCal’ed for future reference.
[Thanks to MacDailyNews Reader “ChrissyOne” for the heads up.]
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