Why I Won’t Buy Apple, But Maybe I Should

Erin is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Apple (NASDAQ: AAPL) may become one of the most beloved stock options of the decade. But I just can’t bring myself to buy it. Don’t get me wrong. I wish I owned it already. But I just can’t bring myself to believe that buying in now, even at its slightly depressed price, is a good thing.

If I had to sum it all up in two words they would be Steve Jobs. Or more accurately, no Steve Jobs. The company hasn’t wowed the general public (which is not the same as the fanboys) in a very long time. Remember the excitement of the iPod, the iPhone, and the iPad? Has anyone, besides the fanboys, really flipped their lid over the fifth version of the iPhone? And the iPad Mini? Sure they get sleeker, faster, and come with more whiz-bangs, but Apple hasn’t changed the world in a long time. And without Steve Jobs, I wonder how long it will be, or if they ever will again?

The marketplace numbers do not give me much hope. You can spin them in several directions. Let me give you some examples. Here are some headlines from the past few months- “Apple Gorging on Mobile Industry Revenue,” “Samsung Galaxy S3 Becomes World’s Best-Selling Smartphone Model in Q3 2012,” “The iPhone 5 is Turning the Tide on Android.” After you read past all of the hype and headlines, it boils down to this- Apple is making the money, but it is still getting outsold worldwide. Yes, making money is a good thing, and a company with great margins, high revenue, and amazing profits is a great thing. We all want a piece of that, if the price isn't too high.

But I can’t help but think back to a trip to Southeast Asia I took recently. I took my iPhone with me just to find out I couldn’t use it there without paying a fortune to my carrier (Sprint). I locked my phone away in a safe place and bought a cheap Nokia (NYSE: NOK) phone and airtime minutes from a man with a motorcycle, umbrella, and Cokes on the corner. This saved me over $500.  I asked around about using my iPhone, and kept my eyes open for anyone else using one. After one month in Southeast Asia I never saw one person using an iPhone. But there were dozens of Nokias, Samsungs, and other Korean brands everywhere I looked. I met several people who owned two or three phones, but why they did I never really found out.

Apple may be the I-ching of the U.S. marketplace, but it does not hold the same desirous effect worldwide. Worldwide sales of mobile phones to end users reached almost 428 million units in the third quarter of 2012, according to a report by Gartner. Overall mobile phone sales were down 3.1%, but smartphone sales were up 47% year over year.  My Asian friends will likely soon replace their two or three phones with a smartphone, according to these trends. But they will probably not replace them with an iPhone.

The Apple iPhone increased its 3.9% market share by 3.9% from the year ago quarter. Apple has sold over 23.5 million iPhones. According to Gartner, Apple and Samsung collectively accounted for 46.5% of smartphone sales worldwide. Samsung accounted for 22.9% of mobile phone sales, while Nokia took 19.2%. Nokia slipped from third place in the second quarter of 2012 to seventh place in smartphone sales in the third quarter of 2012, with 7.2 million smartphones sold in the third quarter.  

Samsung shipped about 50 million smartphones in the second quarter — about double the number of smartphones Apple sold. In the third quarter, Samsung's Galaxy S3 smartphone model shipped 18.0 million units worldwide. Meanwhile, Apple merely increased its market share by 3.9%.

I am not here to say “buy this, not that.” I want to make it clear I am not saying buy Samsung or Nokia over Apple. That’s far from my point.

My point is I don’t know how much further Apple can go up. They have a strong placement in the U.S. smartphone and tablet market. They are already profitable. But I haven’t seen marketplace numbers that convince me they have tremendous growth ahead of them. I see a strong, steady, consistent profit from them. I don’t see them dropping drastically low, or suddenly rising higher. I see them staying right where they are, which if you own them already, is a fantastic place to be. (As long as you didn’t buy above $600.)

But until I see world and generation technology coming out of Cupertino again, I don’t think that is where I want to start putting my money. $585 is a lot of money that can buy a lot of shares in other companies with more growth potential.

So call me crazy. I can handle it. I wish I had bought Apple ten years ago, or even two or three years ago. But for today’s money and price, I just can’t do it.

ErinAnnie has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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