I'm an avid consumer of Apple products and Apple stock. The products have been much more satisfying recently than the stock. If you follow Apple in the stock market, you are likely aware of the rollercoaster travesty for investors the last 3 months - AAPL has fallen almost 40% from it's all-time high of $705/share to an intra-day low of about $435/share. I'm no Rain-man math whiz but thats a huge drop!
For investors that put their money up several years ago, they are still enjoying healthy appreciation and profit. For the unlucky lot, like myself, who for whatever reason were either unable or disinterested in the stock until recently, fortunes are much different. For me, I did not have the money to invest until the last year and so I waited for what appeared to be a good entry point - around $620/share. It seemed like a good opportunity. I mean Apple was almost $100 down from its historic high and the Iphone 5 was about to be released. Plus a super wealthy friend of mine said it was a good value buy. How could I go wrong!!
Many Bulls in the business thought, and rightfully so, that Apple was and still is undervalued based on solid analysis of fundamental performance. They used very luring terms like "PEG ratio" and "forward Price to Earnings ratios". I understand that a growth company with a PEG ratio below 1.0 is undervalued and Apples PEG has dropped from .6 to like .45 or so. (please don't murder me on exact numbers...I think I'm fairly close and the spirit of my facts is accurate :) And Apple has enjoyed ridiculous growth of around 60% Year over Year. For godsake everybody I see has an Iphone and/or Ipad so I figure, yah man, I'm finally going to invest in Apple!
So I jump in at $624 I think and, I kid you not, I literally bought the stock at the absolute highest point it has been since I put my $$ in. It did not go up one red (or any other color) cent from that point. It has been on a steady diet of massive daily losses ever since. A few spikes here and there but down almost $200/share in 3 months. Sounds like the stock chart of, I don't know, HP or Rimm or something. You know, companies so mis-managed and bleeding money that they are literally walking dead. Nope. Apple.
Now I could totally understand if this were a rational reaction to poor sales or lousy earnings releases. But thats not the case at all. You see, Wall Street analysts think Apple should perform at THEIR level of expectations and while Apple beat their own estimates by several billion $$ last quarter, despite having 1 week less in the quarter - 13 versus 14 weeks the prior year - and net profits being higher than estimates, the stock plunges 15% in 24 hours. Articles everywhere stating demand for Apples products is declining and that sales are slowing faster than ever imagined. Complaints that there were only 48 Million Iphones sold in the quarter. Inexcusable. Flat lousy performance by Apple. Clearly demand is grinding to a halt. Disregard the 26.4% increase in year over year Q1 revenues or 11 million more Iphones selling in 1 week less time than last year. OR the fact that Apple has, hold your breath for this one its worth it, $137 BILLION BUCKS in cash reserve. Perhaps they are riddled with debt? that would make sense but uhh, no, Apple is debt free. Nope. The gig is up and we all know now that Apple SUCKS! (notice tongue in my cheek)
Here is where the title to my blog comes into play. You see, the "experts" won't admit that sales of Iphones and Ipads are actually SPECTACULAR because what they are really worried about is that Apple doesn't have another grand-slam up their sleave. Ok I get it. Steve Jobs died and Tim Cook isn't Steve Jobs. That's putting a LOT more credit in Jobs corner than is deserved. Apple is chock-full of amazing intellectual talent and I have faith they have some amazing new products in the pipeline that will continue disrupting current markets and defining new markets. And that is where I think Apple has an amazing opportunity in our beloved sport of gaming.
Apple's ecosystem, astounding hardware and manufacturing capabilities, brand cache and ridiculous resources put them in an amazing position to reinvent gaming and game delivery. I put forth for your consideration the inevitability of an Apple gaming platform - IOS based, bleeding edge hardware performance to rival that of PC gaming and a content delivery infrastructure at full maturity. I prophesize that Apple will release this year, ahead of Xbox and PSx, a hardware gaming platform ready to accept all future AAA, independant, et al game titles of the future. All delivered via Itunes, processed by Igamebox and displayed on the new fandangled Itv. I want it. We all need it. And yet, as is always the case with Apple, we don't even know it yet!
Gaming is an $80 billion/ year industry and Apple is uniquely qualified, capable and needed to revolutionize our beloved gaming world. Imagine a world where Activision and EA are no longer necessary (god yes make it happen)...one where we can buy, play and share any game at any time and almost anywhere all the while making Apple infinitely more money. I never knew I needed this problem solved until now and I hope by the time you finish reading my prophecy, you agree too :)
Let me know what you think!