I don't see how one can regard APPL as a gorilla. They control no standards. They have been very successful in recent years in either creating new product categories or in reinventing a product category in such a way that the category became popular. Moreover, even when competition developed, they have done a very good job of continuing to lead the pack on features and packaging in subsequent generations of product ... at least, they had. Some of that dominance seems to be getting thin. iOS is no longer the dominant platform in new cell phone sales. Yes, iPhone now tops Nokia in smartphones, but that has more to do with the fall of Nokia than the continued dominance of Apple. iPad is still leading, but competition is very strong and growing ... and much sooner than we saw serious competition for iPhone. Not only is Apple going to have to fight for a leadership position in phones and tablets, but their historical success comes in large part from creating a new product that keeps the buzz alive. What is that new product this time? What if they just can't think of one? What if it bombs (remember the Newton?)?
I'm hardly ready to start shorting APPL, but it seems to me that the valuation is very, very high and doesn't take these risks into account. |
