As early as September 2012 I predicted the bear market in Apple stock on twitter.com and to our clients. In my articles on Forbes.com as early as December 5, 2012, the headline was Seven Reasons Why I Wouldn’t Own Apple Stock Now. That was followed by an article in January this year, Six Reasons Why I Still Wouldn’t Own Apple Stock.
Last year I first predicted a price target of $520. That was not very popular. When that was hit on Oct. 16, 2012, I predicted a rally, and then a price target of $420. That was called ridiculous. After that was hit early this year, I predicted a price “with a 3 in front,” which happened when Apple hit $385 on April 19, 2013.
Apple is falling behind, at an accelerating rate. In the first quarter, the Android mobile operating system,which competes with Apple’s IOS, ran on 74% of smartphones compared with Apple’s 18% (Gartner Inc).
IPhone sales climbed about 16% in the first quarter while the entire smartphone market grew 43%. The Apple bulls apparently don’t bother to look at these numbers. They only talk about the big cash hoard of Apple, something I consider a big negative. It’s a sign that management of Apple has no imagination. The cash might be earning 1%. Is that why you buy a stock?
Apple just announced its iRadio. It’s like Pandora and a number of others who have offered something similar for several years. Apple Maps was an attempt to imitate Google Maps, which has been out for several years. The imitation was poor. The “new features” of the newly announced IOS for iPhones and iPads have been on Android since at least 2012.
Bottom line: Apple, which apparently considers itself a “leader,” has fallen behind the competition, and is falling further and further behind. For more, listen to my interviews in April on CNBC-ASIA and China TV. My longer-term target based on technical analysis is $320. New bear market lows will be hit soon. And that’s when the stubborn bulls will give up.
My comment on TV in April was: “Apple is like Sony 20 years ago,” when Sony was the leader in electronics. Now it’s just another one of many. Consumers no longer seek out Sony when they buy. Sony’s early success caused a strategy of always offering fewer features at a higher price, just because they were Sony. Apple has followed the same path. That’s the path to irrelevance.
Apple is no longer the leader. In fact, the competition has leaped over it and Apple is rapidly falling behind. It’s a tired old race horse.
Bert Dohmen, Founder
Dohmen Capital Research, Inc.