Is It Time To Pile Upon The Apple Shorts Or Should We Go Long The Greatest Company In The World?

By: Reggie Middleton | Tue, Dec 11, 2012
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Apple continues to under-perform, yet continues to go exactly as anticipated by the latest 3 quarters of BoomBustBlog research. Let's take a more granular look at this, shall we...

APPL Chart

Believe it or not there are still many naysayers who are attempting to hold on to the notion that Apple is simply in temporary dip, despite having a precise historical template from which to read the #margincompression theory (see Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money!) tea leaves from. Those tea leaves are steeped in a essence of Blackberry (reference BoomBustBlog Research Performs a RIM Job!) and they demonstrate clearly how quickly a seemingly fundamentally strong company that is an adored brand name can hit the skids when it fails to cannibalize its own margins. Basically, if you don't do it, someone else will do it for you.

For those of you who feel that Apple's slide is correlated with the fall of the NAZ, simply look again at the chart above. Apple's fall has taken on a macro-fundamental- forward looking fall of its own. Why is that? Well, after Deconstructing The Most Hated Trade Of The Decade, The 375% BoomBustBlog Apple Call!! I went into detail with Deconstructing The Most Accurate Apple Analysis Ever Made - Share Price, Market Share, Strategy and All. But wait, it goes deeper than that. The seminal research that we released that predicted the rise of Samsung over Apple over a year ago has been proven accurate beyond a shadow of a doubt, now...

Apple - Competition & Cost Structure
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Apple - Competition & Cost Structure
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As can be corroborated through the latest findings by research company IDC: Q3 share of smart connected device market is: Apple 15.1%; Samsung 21.8%

Top 5 Smart Connected Device Vendors, Shipments, and Market Share, Q3 2012 (shipments in millions)

Vendor 3Q12 Unit Shipments 3Q12 Market Share 3Q11 Unit Shipments 3Q11 Market Share 3Q12/3Q11 Growth
Samsung 66.1 21.8% 33.5 14.0% 97.5%
Apple 45.8 15.1% 33.1 13.9% 38.3%
Lenovo 21.1 7.0% 13.2 5.5% 60.0%
HP 14.0 4.6% 17.6 7.4% -20.5%
Sony 11.0 3.6% 8.7 3.7% 25.4%
Other 145.6 48.0% 132.7 55.6% 9.7%
Total 303.6 100.0% 238.9 100.0% 27.1%

What many may fail to notice is the slot below Apple, occupied by Lenovo. The Chinese companies are bustin' ass once it comes to Android phones, not just in price, but also in features and quality as well. As stated in my last missive on this topic, no one can complain about not wanting a phone due to low Chinese quality because they're all Chinese now - including the iPhones and the Galaxy's - reference Smartphone Hardware Manufacturers Are Dead, Long Live The Google-like Solution Providers (this is an article that is a must read for those who do not know what is going in China re: Android phones and technology!).

Currently, the best phone on the market (feature-wise) also happens to be the cheapest phone on the market, and also happens to be a Chinese phone... Sold by a Chinese Company.

OPPO Phone

This phone is one of the thinnest phones ever sold at 6.99 millimeters thick.

It has a 5 inch, FULL HD 1080p screen resolutionwith 441dpi density. This is approaching twice the resolution of the iPhone 5 and a full 1/3 greater pixels more than the "retina' screen.

The phone has the fastest chip on the market, the new quad-core Snapdgragon, materially faster than the chip inside the iPhone, and not just spec-wise but actual real world performance as well.

It has a 2.1 mega-pixel front facing camera that can do full HD video conferencing and a 12 mega-pixel rear facing camera with dual xenon flash (one of the highest resolutions in the market).

This cell phone will outrun and outperform a Macbook air laptop in many instances!

It is not a cheap Chinese knock-off. If anything, the iPhone 5 is a cheap American designed, Chinese made knock-off. Try doing this with your iPhone 5....

 

 

Oh yeah! A two year old already tried it, not with a grown man via hammer and nails, but just with her mommy's keys (may I add that iFixit is a well respected outfit):

 

 

Long story short, if anything, the iPhone 5 is the cheap knock off in terms of speed, durabilty or functionality!

This phone retails, unsubsidized and fully unlocked for just over $500 USD, as compared to the iPhone 5 which starts at $649. As I have been saying for quite some time, Apple is WAAAAYYYY behind the curve in terms of functionality, specs and quality and the only way they can catch up to the Android clan (that is if they even can catch up) is through share price destroying #MarginCompression, as told throughout this blog's Apple research history (see, again, Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money).


This is not a trading site, but the obvious is... Well... Obvious!

Subscribers, as recommended at the release of the iPhone 5, positions should have been moved to lean towards the pessimistic scenario in the lastest Apple report. Now that we have clearly pierced the optimistic and base case scenario valuations, I am now more convinced than ever that the pessimistic scenario will remain the focus in the upcoming months. If you have ridden this long until the iPhone 5 release then shorted, you should have ample profits. Profit protection is key, so to avoid a pop in the stock, take profits and set up a position to assume the realization of the pessimistic scenario in the upcoming quarters.

The latest valuation bands can be accessed in the last few pages of the reports below by paying subscribers (click here to subscribe). I'd like to make clear that this research is worth significantly more than the relatively paltry subscription price it takes to access it. In just the last month, it's already worth more than $34,852,564,500 ($34,852,564,500 - That's How Much BoomBustBlog's Apple Research Was Worth Today!). In addition, it would've, could've, should've saved an entire renknown brokergage firm/investment bank from failure, reference The Blog That Could Have Saved That Institutional Broker - Or - Beware Of Those Poison Apples!!!

 


 

Reggie Middleton

Author: Reggie Middleton

Reggie Middleton
Reggie Middleton, LLC
Perpetual Interests, LLCTM
http://boombustblog.com/

Reggie Middleton

Who am I?

Well, I fancy myself the personification of the free thinking maverick, the ultimate non-conformist as it applies to investment and analysis. I am definitively outside the box - not your typical or stereotypical Wall Street investor. I work out of my home, not a Manhattan office. I build my own technology and perform my own research - in lieu of buying it or following the crowd. I create and follow my own macro strategies and am by definition, a contrarian to the nth degree.

Since I use my research as a tool for my own investing to actually put food on my table, I can stand behind it as doing what it is supposed too - educate, illustrate and elucidate. I do not sell advice, I am not a reporter hence do not sell stories, and I do not sell research. I am an entrepreneur who exists just outside of mainstream corporate America and Wall Street. This allows me freedom to do things that many can not. For instance, I pride myself on developing some of the highest quality research available, regardless of price. No conflicts of interest, no corporate politics, no special favors. Just the hard truth as I have found it - and believe me, my team and I do find it! I welcome any and all to peruse my blog, use my custom hacked collaborative social tools, read the articles, download the files, and make a critical comparison of the opinion referencing the situation at hand and the time stamp on the blog post to the reality both at the time of the post and the present. Hopefully, you will be as impressed with the Boom Bust as I am and our constituency.

I pay for significant information and data, and am well aware of the value of quality research. I find most currently available research lacking, in both quality and quantity. The reason why I had to create my own research staff was due to my dissatisfaction with what was currently available - to both individuals and institutions.

So here I am, creating my own research for my own investment activity. What really sets my actions apart is that I offer much of what I produce to the public without charge - free to distribute and redistribute, as long as it is left unaltered and full attribution is given to the author and owner. Why would I do such a thing when others easily charge 5 and 6 digits annually for what some may consider a lesser product? It is akin to open source analysis! My ideas and implementations are actually improved and fine tuned when bounced off of the collective intellect of the many, in lieu of that of the few - no matter how smart those few may believe themselves to be.

Very recently, I have started charging for the forensics portion of my work, which has freed up the resources to develop the site to deliver even more research for free, particularly on the global macro and opinion front. This move has allowed me to serve an more diverse constituency, which now includes the institutional consumer (ie., investment turned consumer banks, hedge funds, pensions, etc,) as well as the newbie individual investor who is just getting started - basically the two polar opposites of the investing spectrum. I am proud to announce major banks as paying clients, and brand new investors who take my book recommendations and opinions on true wealth and success to heart.

So, this is how I use my background and knowledge in new media, distributed computing, risk management, insurance, financial engineering, real estate, corporate valuation and financial analysis to pursue, analyze and capitalize on global macroeconomic opportunities. I have included a more in depth bio at the bottom of the page for those who really, really need to know more about me.

Visit his blog Boom Bust Blog.

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