Apple (Nasdaq: AAPL) released new iPhones in 11 critical markets. Preliminary data indicates the expensive model is selling very well. Early adopters are driving this demand. People line up for days on end ahead of time sleeping on side walks if need be to be among the first to buy the phone. Not sure why Apple doesn’t auction them off to highest bidder and leverage the insane demand. Maybe donate money to charity or something good like that.
Do not be suckered by the addiction mentality of early adopters. Demand is a long-term equation not a one day door crasher sale. A buy or sell decision on one day data is foolish and incomplete.
A correct fundamental analysis would concentrate on how the product is being extended and if it fights off Android. Battles are fought not on one bullet. All generals know to prevail you need mass on the battle field. Speaking of which Microsoft (Nasdaq: MSFT) Nokia and Blackberry (Nasdaq: BBRY)
George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti
Microsoft (Nasdaq:MSFT) in a controversial move has acquired Nokia (NYSE:NOK). Not sure if this is to secure a tenuous toehold in mobile devices using Windows or is it a way to source a new CEO. For $7.2 billion it better be to work the Windows toe hold, because you can get lots of excellent CEO’s for less than $7.2 Billion.
The acquisition comes lockstep with Ballmer’s retirement announcement so there must be a plan. Microsoft is solving Nokia’s capital shortage problem. Microsoft is relying on Nokia old Mojo coming back. Maybe they got it and maybe they don’t. Stand by for product announcements and see what they roll out.
Microsoft and Nokia were first movers and disrupters. They clawed out a strong market share and went to sleep comfortable in the status as world-class dominator. They weren’t watching and competitors started to eat their lunch. Nokia missed a few turns on the road and found themselves in the ditch.
The major flaw that everyone keeps shrieking about will be the lack of apps for a Windows-based product. Some claim developers are too beleaguered trying to cope with Apple and Android applications. This is wrong. Developers will go where the money is. Microsoft has $61 Billion in cash and growing.
Here is how Microsoft will need to throw their money around to develop the right set of trends.
- Bonus developers for creating Windows Driven Apps. Most will develop apps if the Windows Smartphone develops more traction.
- Develop apps exclusive to Windows which will drive sales of Windows Smartphones and cause some abandonment of Apple and Android. Microsoft is still strong in enterprise applications. There’s lots of stuff that is App ready which should be exploited quickly.
- Enterprise apps will drive multiple unit sales. Not the ones and twos at retail kiosks. Microsoft is not dry of app ideas just unexploited.
The exclusivity will the way Microsoft/Nokia screw with Apple and Android. Watch for lawsuits. but in the ensuing years market positions will be established.
George Gutowski writes from a caveat emptor perspective.
Image via CrunchBase
Here is a list of short sellers of Nokia (NYSE:NOK). They usually are long Apple (Nasdaq:NOK). So if Apple weakens some and Nokia gets a pulse watch for price action downward on Apple upward on Nokia. Everyone cannot leave the room at the same time.
Blue Ridge Capital: Short -1.34% Nokia
Coatue Management: Short -0.8% Nokia
Eton Park Capital: Short -0.95% Nokian Renkaat
Lone Pine Capital: Short -0.57% Nokia
Maverick Capital: Short -1.7% Nokia
Viking Global: Short -2% Nokia
Dichotomy here as some value investors have gone long the troubled handset maker due to valuation, while many GARP investors short the company due to its supposed market share problems.
Hedge funds often go long the ‘best of breed’ companies shorting the struggling companies in same sector. When the struggling company gets better financial life signs. Value investors start to nibble and short strategy is no longer compelling. Short positions are ultimately bullish.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti