Content provided by Case Eichenberger, CLS Internal Wholesaler
Apple Inc. has a long track record of being industry innovators. Steve Jobs started the tech giant, got fired by the board, and eventually hired back. He brought us (as if I need to tell you) the iPod, iPhone, and iPad. Jobs and Apple basically redefined some technology and created new with the tablet. With Jobs’ passing a few years ago, Tim Cook is now in charge. In today’s age we are constantly thinking of new ways to improve and new products to develop. What has Apple (AAPL) done for me lately?
Has confidence in the Cupertino California based company waned in the past year(s)? Let’s take a look at the short term numbers: Apple (AAPL) – YTD: DOWN 14.50 percent; 1 Year: DOWN 18.43 percent. Conversely, the S&P 500 YTD is UP 15.44 percent and the 1 Year is UP 30.54 percent. Not a very good investment as of late.
As a self-proclaimed Apple “fanboy” I quickly submerged myself in their iOS ecosystem of products. I purchased my first iPod in 2002, iPhone in 2009 and iPad in 2011. I also own a Mac and 2 Apple TVs. Apple has seemed to have such a stronghold on these products, particularly the mobile phone (iPhone) and tablet (iPad). It has not been since lately that Apple seems to have slowed down the innovation and their stock price seems to reflect it. I have to admit that I am starting to let my eye wander elsewhere to new, shiny, and exciting products available to consumers from big players like: Samsung, Microsoft, and HTC.
Why? Increased competition is the obvious. Not just competition, but better, more attention grabbing products and great marketing. I believe that most products and more importantly, their campaigns, are targeted directly at me and my generation. We grew up with technology and millennials are a huge target market for these companies. I will pick on the iPhone mainly from here: first introduced in 2007, 3.5 inch screen; industry changing phone with little to no competition. Fast forward to 2013: 4 inch screen, enormous competition. Most phones now are at least 4.5 inches to 5 inches; and some “phablets” are 5.5 inches. This is due to the fact that the majority of your time is not actually talking on the phone (weird, I know); but rather, viewing content with apps, playing games, and surfing the web. Every year there are dozens of new “iPhone killers” from the likes of Samsung (Galaxy S 4), HTC (ONE), Motorola, amongst several others. Whereas, Apple, puts out 1 phone each year and most of the time it is the same as last year’s version with a few upgrades. In today’s tech age, that simply does not cut it anymore. The iPhone is their flagship, it is the one that the world looks forward to seeing each year and the one that most likely affects their stock price.
I don’t pretend to know what Apple will introduce this year, but I do know that from one fan’s perspective they need to start innovating again. Rumors of an iTV and iWatch do not appear to satisfy consumers and Wall Street anymore. Confidence is waning I believe, at least from my perspective. I believe they have some great products in the pipeline, but for now, I hope they start innovating with the one that wakes you up in the morning, keeps your business running through the day and helps you connect to your family and friends.