Saturday, May 23, 2009

Why I Would Sell Apple

I have held APPL long on and off over the past 10 years. I sold my shares that I had held for over a year back in March on its recent runup and missed out on some additional gains. I have been looking for a re-entry point but something happened this week that made me so mad at Apple that not only would I not buy APPL stock right now, I am thinking of shorting it.

In these economic times, people may be making purchases, but they are going to look for bargains. They are also going to keep monthly expenses at a minimum. Cut out the waste, keep the essentials.

Well, I was going to get my son an iPhone as a grade school graduation present. I actually went to order it. Had it picked out, entering all the paperwork, etc. But, the At&t rep dropped the bomb on me. He said we had to sign up for the non-optional $30/month data plan for the entire 2 year contract. Say what? This is on top of the $20/month unlimited texting plan. This is for a 14 year old???


I asked what we get for $30 and the key difference from that and the $10 data plan is the $30 plan includes enterprise email. My son doesn't even use email. It doesn't matter. Still costs $30 a month and it is not an option.

Fine, well, I do have an option. I just won't buy it. I bought an LG instead which is cooler than the iPhone and includes the touch screen and a slider keyboard and my son liked it better.

I have to believe this exclusive deal with At&t will really hurt Apple. The iPhone is a huge part of Apple's revenues. There are way too many options for people to choose from. The rep even said a lot of people are opting out of their iPhones now due to the $30/month and the iPhone really is not the best quality.

I think we will see Apple struggle in the upcoming quarters to meet revenue expectations based on the iPhone sales dropping, and I believe less people are willing to pay additional money for a Mac these days than they did even 3 months ago.

So, this is not based on fundamentals. It is based on market research, albeit a personal one.

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