Category Archives: Apple

Apple doldrums…why?

I think what has people spooked is that Apple is no longer the coolest game in town. Tastes change. I and others have heard anecdotes about how high school kids who are the trend-setters don’t want iPhones because everyone, especially their parents, have them.

I really believe much of the AAPL doldrums are caused by memories of RIM, PALM, etc who dominated their markets for a time, but then were disrupted by others which destroyed their businesses. Samsung/android is doing this now.

Apple needs new products to re-set these expectations. The long rumored Apple TV isn’t going to cut it. They need a product.

The iPhone needs to innovate more in features and less in design. Fingerprint authentication, mobile payments, NFC, etc are critical to re-disrupt the market.

A friend told me he lost his iPhone on the ski slopes and someone found it 18 months later, plugged it in and it worked. I’ve seen an iPhone immersed in water, and it still worked while under water. That is amazing, but also speaks to overengineering. There is a balance between investing in quality product design and investing in the software on the product, especially when most people don’t keep their phones for more than a couple of years.

I also believe that long-term, android dominance is going to fracture. Windows is going to gain market share at its expense and Samsung is going to introduce a competitive OS. When android fractures, Apple’s ecosystem will prove dominant.

Should you exit short term AAPL options?

I created this post for friends holding Apple call  options with April strikes. But it’s a useful guide on bottom-fishing Apple.
Throughout the crash, websites have been tantalizing people with the possibility of a v shaped recovery or some sort of huge bounce which will restore value and allow a decent exit.
It isn’t going to happen. At least not for the Aprils. If you’re in April, your best bet is to roll to May or later asap before theta decay erodes any remaining value.
Apple was just massively oversold. The resulting bounce has brought us up a measly 25 points and upward momentum has stalled. We just broke to the downside of a bear flag. We’re heading back down to re-test the lows. 
Now April’s only chance is that this time, Apple makes a higher low, or lower low on lower down momentum that actually holds. Positive divergence has not held throughout the crash. 
Until Apple makes a higher high, and a higher low, the downtrend is still intact and we can expect lower prices. 
Forget about 550 in the next month or two…there is no evidence for this at all. It’s hopium (possibly designed to get people to renew just one more month).
The only hope is that the Feb max-pain point of 495-500 ( is going to suck us upwards sometime in the next three weeks. I have only low confidence in this. 
Absent that, there is nothing right now that says we should go higher. We’re not oversold on the hourly or daily. There are no expected catalysts until Apple reports earnings in April.
What I’m watching is the weekly. 
RSI touched oversold on the 14 and shows divergence on the 7. MFI is oversold. Wait until positive divergence is confirmed and the macd turns up. This should coincide with a 1-2-3 trend change on the daily. Then you’ll know the bottom was in. But I expect this process to take another month or two.
And finally, ask yourself – would you buy the spread you own here at these prices? If not, then sell. Don’t bet on more hopium. Save your ammo and wait until we’re in a confirmed uptrend to buy. 
Best to sit and watch Apple right now. There will be better chances to buy in the middle of the year when guidance should be improving. 

Apple TV Will Revolutionize Content Delivery And Advertising

Re-posting an article posted on Seeking Alpha in May.

Apple TV Will Revolutionize Content Delivery And Advertising

Update: The Wall St. Journal reported today that Apple is in discussions with major cable companies about letting consumers use Apple TV to deliver cable content, not just Internet content. It’s an interesting play by Apple. Delivering cable content and internet content side by side would certainly provide the best user experience, and would be in Apple’s best interest, but I didn’t analyze it simply because I don’t think the cable companies will ever go for it. I figured they’d just dig in and play defense to try and protect their economic fortress. In fact, that’s still my prediction. Why would cable companies hasten their own demise by giving Apple an easy presence in their users’ households?

But if a few cable providers do partner with Apple, they’re either reckless, or they have a plan for how they will capitalize on Apple TV. It will be interesting to revisit this issue when some agreements are in place and we can determine if the cable companies have foresight or foolishness.


Apple: Another Reason For Its Cash – Insurance Against Disruption

Re-posting an article posted on Seeking Alpha last year.

Apple: Another Reason For Its Cash – Insurance Against Disruption

I haven’t seen anything that would invalidate this article. The dividend announced earlier this year was minuscule, indicating Apple still wants to hoard its cash pile.