Sunday, May 24, 2009

Why I Would Buy Apple

Sounds contrarian after my last blog, but this is what makes markets and what cause stocks to spike. Apple's sales of iPhones are not increasing as they would like especially with the introduction of selling via Walmart stores. This is mostly due to the exclusive contract with AT&T and the fees AT&T are charging for the iPhone service. iPhones are targeted toward the casual user, not the business user. These casual users want the iPhone for texting, music/videos, and surfing the web. Not necessarily for email.

Yet for a casual user of the iPhone, even with a small data plan of, say, 500 minutes, they will get charged $40 for the plan, $20 for unlimited texting and $30 for data. Only the $20 for texting is optional. That would be a $70 minimal plan and if you add more minutes or texting, you are talking $100.

Many casual iPhone users are not going to pay that in this economy when they can find a phone as good or better for a lower rate, especially for data usage.

But, this is old news. What if AT&T came out with an exclusive iPhone package which included unlimited texting and data at $30 plus whatever phone plan you choose? That is a $20 per month reduction. I think that would draw in a lot of potential iPhone buyers and boost Apple's sales of iPhones dramatically, including at Walmart. Yours truly included.

AT&T have already been discussing this and are working with Apple on a suitable plan to meet both companies needs. If AT&T came out with such a package, hoards of buyers would come in, and thus, the stock of Apple would have a quick spike up.

So, in this scenario, I would be a buyer of AAPL. I sure would not be short APPL with news like this a possibility.

OK, all of that said, personally I would not own AAPL right now because it will be driven by news or lack of news.



    good read, u like

  2. you lost all credibility after this write-up. Good luck.

  3. Why did I lose all credibility? I wrote it two days ago. And sure enough, today someone mentions it in the media and the stock rises. I would say I was one step ahead of whatever analysts said it today.