There has been a lot of talk lately about AAPL being undervalued and how it is on the verge of a breakout, but why? It seems to me that the drop in price is justified. I remember the days when Apple products blew my mind, like the first itouch, iphone, macbook air, ect. Today that amazement and lust of the new Apple products are gone for me. I don’t really care about slight upgrades to old devices that Apple keeps giving consumers. It seems like the business strategy at Apple is re-package, re-price, and don’t for the love of god innovate.
On the other hand, Google is blowing my mind! It really isn’t that I need their new concept products like Glass, Google Car, or Chromebook, but it is that they are amazing! I am feeling the same amazement and lust for Google’s new products that I once felt for Apple. When a company like Google keeps innovating it raises the bar and other companies have to create cooler products to keep up. This is a win-win for the customer. It usually means cooler products, cheaper prices. It would also be great to Google’s stock price. Having the first mover advantage usually rewards a company’s stock nicely, as we have seen with AAPL.
I haven’t heard much about new Apple products, other than the iwatch they are making and a regurgitation of the iphone. Neither of those products seem great to me or justify a breakout for the stock. Apple is starting to look like the new Microsoft, but will they innovate and turn it around?
What are your thoughts?
I think Google's biggest problem is that they're not always able to monetize whatever they do create. Also, I may be wrong on this because I haven't followed Apple in a long while, I believe Apple's biggest issue is with decreasing margins. In terms of top-line growth, they're still selling very well. They may also have another trick up their sleeve if this iTV becomes a reality (but that's looking more and more like that won't be the case or that it won't be as disruptive as we previously thought it would).
Having said that, I would still invest in Google today just because they're now so big in search that it's fueling (hopefully) more profitable products in the future. While I don't think Google Glass is that useful from a practical standpoint (cool tech though), I'm clearly in the minority and people are already salivating over the prospect of owning one. Their profitability is on the upswing and Apple will have to get it's act together over the next 2 years or it will continue to see it's stock price drop.
Great analysis. Definitely agree in regards to Google's problem to attain revenue from products.
The iPhone 5 cannibalizes every single Apple product aside from iTunes. I think they're keeping that pile of cash for when they eventually turn into a HF.
Maybe I should start looking at exit opportunities into AAPL...
Just saw this on Yahoo Finance, "Not long ago, street analysts were putting up price targets in excess of $1000 for Apple (AAPL), which is now below $450, more than 35 percent off highs. Although Lee admits that he's "always worried" as an analyst, he doesn't think Google will suffer the same fate."
The rest of the article is interesting. http://finance.yahoo.com/news/why-google-headed-1-000-153315448.html
Google is going to change the world. They have a lot of things that they haven't fully monetized yet but this is all building up. Think about the technology with the car. Unreal.
Apple is a glorified hardware company with deteriorating margins. Don't get me wrong, I love their stuff, but there really is nothing about Apple that makes me think they would see gains like they did in '03-'12. God knows they have the cash to buy a small country though.
Google has already demonstrated products such as glasses, automated vehicles, 1gb/second internet, among many others. While most of these might be duds, just think of the returns if even one of these was to take off like smartphones did. Google's branching out makes me think they really do have a shot at catching the next 'wave,' whatever that is. Although I feel like Jim Cramer was right in pointing out the possibilities that Apple has with their cash. They can literally do almost anything they want.
Google is innovating, Apple is just producing.
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