AAPL: A Bubble in the Making (One Month Later)

Apple Inc (BATS:AAPL)  
infinite_margin 20 months ago
After my macro analysis of AAPL reaching all time highs, it seemed difficult to believe I was saying AAPL was a bubble, when it was trending to become the first trillion dollar company. Like all bubbles, I know people vastly misunderstand exponential growth, and why it's unsustainable. Short and sweet, last month AAPL was above 700$, and I noted that over the past 10 years or so, AAPL had an annual growth rate of roughly 35%. That number was staggering, and is highly unsustainable. And here we are...down over 20%, the largest correction since 2008.

Chart from 1 month ago:
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LONG AAPL : Detail Analysis
AAPL started 2014 and ~ $553 before tumbling to $499. A lot of investors, included myself , though AAPL was the new Microsoft, a juggernaut incapable of coming out with "innovating" products. 28.9 % later , AAPL is silencing its critics. last quarterly earning report was excellent : -> $11.62 vs. $10.21 -> Revenue up 4.6 % -> iPhone sales up 17 % And now the iPhone 6 is coming this fall, by far one the biggest product launch in the company 's history TIME FOR A NEW iPHONE : Of all the iPhone owned out there, it is estimated that : ~ 20 % owned iPhone 4 ~ 28 % owned iPhone 4S ~ 25 % owned iPhone 5 ~ 4 % owned iPhone 5C ~ 8 % owned iPhone 5S Based on that data, about 70 % of iPhone users are due to for a new phone, this will/should increase sales of the next iPhone model, by an additional 2 million units . Basically all these iPhone 4 users will most likely upgrade to iPhone6 , according to UBS Analysts Steven Milunivich & Peter Christiansen. BIGGER IS BETTER One of the biggest complaint from iPhone users was that the size of the screen was too small. AAPL lost market shares and sales to rivals such as Samsung , HTC and other because of that. Now it is rumored that two models of the new iPhone will be available, a 4.7 inch and 5.5 inch (scheduled for 2015). This is great news ! especially for android users who couldn't switch to iPhone due to the small screen. This should also increase sales in Asia, where big screen phones is a must. ACQUISITION (BEAT) AAPL recently acquired BEAT , a headphone maker, for $ 3billion dollars, the biggest acquisition made by the company so far. A lot of people said AAPL overpaid for the company, because the headphones are mediocre. Well, AAPL couldn't careless bout the quality of the headphone, they paid $3 billion for the "cool factor". Think about for a second , what is the fastest music genre in the world ? EDM or Electronic Dance Music( look around you , most of these kids own a pair of BEAT, and will continue to pay premium price for them as long as EDM remains relevant. Also, iTunes revenue has been suffering, down 24 % year -over-year . Revenues are falling as users turn to streaming services such as Pandora , Songza, and BEAT , to meet their music need. With BEAT streaming music services, AAPL will finally have a presence in the subscription music services ( iTunes Radio is free) DIVIDEND & STOCK SPLIT - AAPL will increase it's dividend payment and a 7 to 1 stock split is scheduled for June. TECHNICALS - AAPL well above its 8 month M.A - Cash flow is once again above 0.00, perhaps indication another nice price ascent just like the one we saw from 2009 to end of 2012. CONCLUSION BUY Cheers Algo
Fri May 30 17:20:55 2014 UTC
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Algokid Nov. 16, 2012, 9:48 a.m.
Your chart capture what i've been saying to my partners for months now, AAPL is running on fumes. Declining volume and rising stock, usually not a good sign. thank for sharing this
yalo Nov. 17, 2012, 4:57 p.m.
very good analysis, you can give a price to buy? TG?