G-d bless Apple and Steve Jobs. They have transformed the way people listen to music like nothing we imagined. The iPod was the perfect solution. Simple, ergonomic, stylish, classic. Steve Jobs has done a wonderful "job" transforming the company from a has been computer manufacturer into a music gadget empire. So what will the iPhone do for Apple (no longer Apple Computer, they dropped that name recently). The iPhone is sleek no doubt, but it doesn't really offer more than what's out there already. Research in Motion's Blackberry is coming out with a device that has all the iPhone is capable of doing plus GPS capabilities to boot. So if you're thinking about spending the 000's on a GPS for your car, think again. I will let you know ahead of time that I own 2 iPods. However, I have no intentions of spending $500 minimum for an iPhone under a 2 yr contract. I think Apple will be in for a surprise when they will realize how quickly they will have to drop their prices to match the likes of the Blackberry, the Moto Q, or a Samsung BlackJack, or whatever. I think the next big winner in the phone market is the one that caters to watching tv on your phone and offers the greatest amount of content. That will be the winner in my opinion. Right now, the companies offerings are very similar, it's more a matter of getting the esthetics right. Apple's iPhone looks pretty hot, no doubt, but that's not proprietary and I would expect others to come up with sleeker products.
I have a lot of respect for Jobs' passion for the company and the products they produce. However, Jobs seems to also evoke a style of an untouchable character. Cisco is calling him on this, by putting them to the test over the use of the name of the iPhone. I think it was a little presumptuous of Apple to start promoting that product under that name on their website before any settlement with Cisco took place. They had a deadline of midnight this past Thursday and Cisco extended them a break until next week to offer a solution in the matter. While, I think the outcome of this case is immaterial to both parties, including Apple, I think it highlights the fact that Apple has reached a zone and complacency will start to consume the company. I personally think that Apple's stock will likely suffer in the coming months. If you're looking for a winner as far as the iPhone is concerned, go with AT&T, who's Cingular unit will be the sole provider of the product. If you're Canadian, you can go with Rogers, however, Apple has made no formal comments about entering the Canadian market. Ironically enough, Apple would be in dispute with another firm in Canada over the use of the iPhone name there too.
How does this impact the stock price. Just look at the graph of Apple and you'll see how stuck the stock has been in recent months. I would note that the stock is below the recent 200 day moving average for those that are technically inclined. I think the stock may see a pop leading up to the release in June, however I think the stock will be flat to down for the next 3 months until May. Notice how the stock has done vs. the S&P 500 over the past month, and you get a sense that the stock is tired, even with analyst's and their $120 target prices. You want to know something else of interest I picked up on. Senior Vice President of the iPod Division , Anthony Fadell, has been very active in early February 2007 selling 100,000's of shares in options he exercised. These options weren't up for expiry. I think he is as close to the iPod as anyone else other than Jobs himself, and he maybe sending a signal to the market that Apple's stock is starting to get a bit crabby. Time to take profits and duck for cover in the coming months!
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