It’s Not Gravity That’s Causing Apple To Fall


Apple

Unfortunately for Apple and its shareholders, they are learning a valuable if not predictable lesson.  It’s much more difficult to stay on top than to make it to the top.  When you’re on top, the entire world is gunning for you.  That’s a lot of firepower brought to bare.  Second, technology like any possession, becomes unexciting after a time.  In the world of technology you must always get better, surprise and excite your audience.  It’s simply not enough to say, “new and improved” like any popular laundry detergent.  The newest iPad for example has retina display and a clearer picture than the previous iPad, but in truth, there’s almost no difference.  The same can be said of the iPhone5, it’s not much better than the iPhone 4S.  At some point, unless there is another revolutionary invention, people will become unmotivated.  Then there’s the Steve Jobs factor.  He is irreplaceable.  It’s not unlike Microsoft’s performance since Bill Gates relinquished the top job. And no different than trying to replace Willy Wonka.  Although we don’t know for sure, I’m fairly certain Charlie Buckett never came close to repeating the success of the Everlasting Gobstopper.  Yesterday, CLSA analyst Avi Silver downgraded shares to “outperform” from “buy,” lowering his price target to $505 from $575. According to MSN Money, Silver cited “weaker iPhone trends” as the primary reason why Apple’s shares have been so weak recently. Shares of the tech heavyweight have fallen 18.9% year to date, and more than 38% since the iPhone 5 went on sale.  Quite Frankly, where does Apple take the iPhone from here?  The Samsung Galaxy S3 with Windows 8 is a competent competitor even with the smaller selection of apps.  The Microsoft Surface, is extremely competitive with the iPad, better in many ways.  Microsoft has done a great job marketing the Surface Tablet which is as much a laptop as a tablet.  The Surface comes pre-installed with Windows 8 and Microsoft Office. The built in stand and USB port make it even more user-friendly.  Now there are millions of die-hard Apple fans who will buy nothing else but along with better and more competent competition, comes pressure on prices.  That translates directly to a lower margin and bottom line.  Even in the Apple World, retail is retail and the market sets the prices at the end of the day. So until the next revolutionary Apple creation, the stock is unlikely to come near its recent highs, even as the market has. Apple can’t simply improve on its previous models and expect record profits.   Apple will fall far out of favor before the iPhone 20 hits store shelves.

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