Investors and consumers alike are truly in love with Apple. Some are new to this love affair, while others are veterans of a great run. Either way, the remaining part of 2012 lends itself to some interesting action in the stock. I will not serve to bore you with the news you already know, the items in the pipeline, rather, I will bring up a few concerns I have looking at the future of the tech giant. My first concern focuses on the release of the iTV and where it leads Apple.Concern number two revolves around the growing popularity of the iPhone and how this may serve to hinder Apple in the future.
Apple products scream cool and sophisticated. When I think about the Apple stock, all I can think about is wads of hundreds and fast cars. Apple has handily earned the previously mentioned perception, they have done very well for consumers and investors alike. That being said, the iTV has set itself up to revolutionize the television industry. It has been set to do so by both the executives in the Apple boardroom and the masses throughout the world. Assuming that the iTV lives up to the hype, which by looking at Apples previous success, one can give the benefit of the doubt on, will Apple live up to the investors hype? Apple has blown away the investing public time and time again with its extroadinary iPhone sales numbers, but will it be able to replicate that with the iTV? One can take the side of the arguement that the iTV will simply serve as an addition to the many other successful Apple products, meaning that it is merely the icing on the cake. Though if you want to make the argument that the iTV is the next "IT" product for Apple, things are not so clear. To begin with, one must realize that the other television production companies will not go without a lot of kicking and screaming. RIMM merely handed over its market share as if we live in a socialist society, Sony and the other big players will not. Secondly one needs to be very concerned about the price point of the product. The iPhone was able to sell massive amounts of phones because the phone carriers supplemented a majority of the cost. One must ask, what will happen without supplements for the iTV? With the clout that Apple has, they will make the cable companies pick up some of the bill, all this has yet to be seen. So I sit patiently waiting to see how the iTV will play out for investors.
My next concern deals directly with the Apple flagship product, the iPhone. Don't get the wrong impression, I have one sitting beside me as I write this post. My concerns actually stem from the success of the product. What seperates a Range Rover from a Explorer, or a Porsche 911 from a Mustang? Your first thought is likely the cost difference, which is correct, but more importantly the exclusivity that comes with a higher price. Many Americans can go out and get a Mustang or Explorer tomorrow with the help of the bank, very few can do that with a Porsche or Range Rover. The iPhone for the longest time has marketed itself has the foreign car of the smart phone world, attempting to sell itself to the upper echelons of society. What happens when everyone (waitresses to grocery store attendants) from all walks of life has this prestigious product? The iPhone ceases to be exclusive. This may have some negative effects in the future, as Apple suggests as of yesterday, that it will continue to have one size screen (meaning just one new product). I had hoped that they would come out with different sizes and price points, they don't seem to want to. You can sit there and argue that the old version of the iPhone serves as the lower end price point. This may have some merit, but the fact remains the iPhone at $200 is no longer exclusive. A portion of its appeal has disappeared. If everyone can have caviar and Cristal for dinner (or lunch as I prefer), it no longer has the same allure. This may be remedied in the future through the phone carriers giving up supplementing the cost of the iPhone, increasing the price to make it out of the grasp of many. Again we will have to wait and see how this plays out, in the meantime I will go FaceTime my 14 year old niece on her iPhone.
Though I sit here, in deep thought, worrying about the future of Apple, I am still very bullish short term. Apple has held up nicely compared to the devastation that Fecesbook and other social media players have seen. Apple has continue to hold up fairly nicely in this market and I may look to get in soon.
Watch video below for a good laugh.
Photo by Tommy Klumker
One thing is for certain: Apple, whilst under the command of the great Steve Jobs (Blessed be His Holy Name), was very, very good at building a fanatical consumer base through consistently delivering new products that were sexy and down-right cool. In the aftermath of the death of His Holiness, Apple is being tested, and I agree that the company's performance can best be described as "sketchy." I believe that Apple's success in the future will be determined upon how well they will be able to maintain their fan-base that Jobs has so painstakingly built. If Jobs was a true mastermind of brainwashing, then Apple will be able to get by with delivering mediocre products while still bringing in profits. However, if the fanatics do wise-up to Apple's slacking performance, it would be the perfect time for a new company to come on to the tech scene offering a new vision for cool, sexy, and exclusive tech.
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