Forbes posted the question, is it "Time to Buy" Apple since it has dropped 5% in 2 days? My answer is - not for me. The recently released iPhone 4S has sold like gangbusters out of the gate due to pent up demand here in the US and abroad, where it will be available for the first time in many areas. In the short term, I suspect Apple will sell record numbers of iPhone 4Ss. In the long term, however, things do not seem so rosy. Let's be Frank here, the advances of the iPhone 4S over the iPhone 4 were a faster processor for a phone that wasn't all that slow, a better camera for a phone that had one of the best cameras around, new innards that let them manufacture fewer different iPhone versions with no direct consumer benefit, a new antenna design which is a fix and not a feature, and Siri - which is software and could work on the iPhone 4, except for being able to activate it by raising it to our faces, apparently. After about 16 months of no new significant iPhone hardware, Apple delivered practically the most minor update they could in terms of end user experience.
Admittedly, I do not have any special insight into Apple's future plans, but I do see a rapid evolution of the mobile marketplace where Apple's business model, and Steve Job's DNA that they say is infused everywhere, may not thrive as it has in the past. In a nutshell, the iPhone and iPad are the core of their business and are largely responsible for the rise in the adoption of their other products due to brand loyalty and users wanting to remain within Apple's ecosystem, recently expanded by iCloud. The problem is that Apple's greatest strength in the iDevices is what could be its greatest shortcoming. Apple's greatest strength has been platform's simplicity - in only providing the features that the majority of people have needed and leaving out the 'fringe' features because they make the iDevices overly complex and more prone to problems from user-error and from complexity in programming. When the iPhone got its start, this strategy worked spectacularly well because people were new to the platform. But as mobile devices evolve, people will (and have) become more savvy and will want more of the 'fringe' features to satisfy their personal use, which will vary widely. This applies to both hardware and software.
Apple's iDevice competition on the other hand, primarily Android devices, have hardware vendors producing phones and tablets with a wide range of progressively superior features and a progressively wider range of features practically every month. Google is making significant changes to the Android operating system to keep up with the evolving needs of mobile technology users and Android itself is open to interactions with the operating system while iOS is basically an Apple communicator plus an App Launcher with apps fundamentally operating in their own independent space. In summary, Google's Android is evolving towards being a desktop replacement while Apple's iOS has mostly remained very much the same.
By no means am I saying that Apple is out of the game - far from it. In the blink of an eye they could reclaim their obvious dominance. I am simply illustrating why my answer to Forbes's question as to whether it is time to buy Apple stock or not is a no. want to see something come out of the company that at least measures up to the competition. Namely options. Bigger screen, 4G LTE, and Flash would be a great start, except Adobe gave up on it the other day due largely to Apple's refusal to allow it on their iDevices. Hopefully Apple has just taken a pause in advancing their hardware while creating their new mega-office/HQ and iCould, which they needed desperately to 'lock' people onto their platform, especially since the competition fundamentally already had it (branded email, calendaring, contacts, document sharing, picture syncing, etc.), and they will be back on track in 6 months or less. After the let down of not delivering the iPhone 5 after 16 months, I am not buying stock on any rumors either.
One more thing... Just before the first Droid launched on Verizon in 2009, I could clearly see that within Apple's grasp was the ability to reinvent the Internet - where Apps were used instead of web pages and Apple was at the center of it all and in control of app publication. But Apple's refusal to put iPhones on all carriers left the door open for the Motorola Droid to be launched on Verizon in 2009 which changed everything in mobile technology, again. Apple has since gone from having the #1 smartphone platform, by far, to the #2 smartphone platform - and was reportedly surpassed in sales for the first time by 2 individual Android phone manufactures last quarter. Apple, in my opinion, is overly focused on profit - which ironically is something Steve Jobs said was what went wrong with Apple in the 80's and 90's. Apple has let money lead them into making highly profitable and exclusive deals with carriers while opening the door to competition, they provide few options for their customers which makes for lower manufacturing costs, but further opens the door to competition, and they continue to price their other hardware at a premium which restricts wider adoption and control of computing standards. They have been immensely popular and have a big pile of cash, no doubt. And their customer service and customer satisfaction have been at the top of their industry. But they risk falling back into also-ran status like they did in the desktop space compared with Windows PCs.
I hope Tim Cook and crew have enough heart to adapt to the changing mobile technology landscape. I give them a better than 60% chance they will, but there are stocks with better odds than that out there.
