Wednesday, July 22, 2009

Bye, Apple.

I sold remaining shares of Apple, Inc (AAPL) today, into strength after earnings report. This is a strategic decision, I wanted out of Apple for a long time, but wanted to get more money for my shares.

My reasons for selling Apple are outlined here. That article was published more than a year ago, but all points are still valid. Actually, they are more valid now. Point by point:

Steve Jobs health is much worse, and Apple still doesn't disclosure this material information. Even SEC is investigating the matter.

iPod market is not growing.

Computer market share is down, in the faltering economy. It will grow back, but growth is limited for obvious reasons (price). I still don't see serious attempts to get into enterprise computing.

iPhone market share is growing fast, so far. But there is competition around. Blackberry is still king of corporate smart phones. Palm Pre might or might not be Palm's (PALM) savior, but it's a pretty interesting product. Google's (GOOG) Android OS is making inroads, and there is a lot of free software for it. And, unlike iPhone, Android plays flash movies (and flash plugin is promised for Palm Pre). There are also a lot of smart phones using Simbian OS. And some Linux based.

Another problem is size. Apple is just to big to grow as fast as it did last 10 years. But P/E is still suggests fast growth. I don't see any new areas where Apple can introduce new products and make money. Unless they want to change videogame industry. But margins on game hardware are not what Apple is used to.

In short, Apple is not good enough as an investment. Stock can be used for trading and I will keep it on my radar for that purpose.

Full disclosure: at the time of publication author had a long position in GOOG and no positions in other stocks mentioned. Positions can change any time.

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