Apple’s $600,000 Weapon
Jason is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
"Luminas, Galaxies and Droids, Oh My!"
With so many phones offering comparable, if not legally indistinguishable (see Apple (NASDAQ: AAPL) vs Samsung) features to the iPhone, one might argue that the market should or could level out among phone makers.
But it won’t…
That’s because right now Apple has something no other phone maker has, and due to recent events I am able to simply call this the “$600,000 Weapon.”
What’s the Weapon You Say?
Well first let me explain where the $600,000 dollars was spent…
Earlier this month a Californian Apple store was visited “head-on” by a blue BMW that exploded through it’s doors and glass windows. The driver then inched the vehicle deeper into the Apple showroom as a person exited the vehicle and began grabbing as many iPhones and iPads as possible (as if they were on “minute to win it”). Unfortunately for the thieves the security gate closed on them quite readily and trapped them in the store. Despite their efforts to smash through it to escape an arrest was made. The driver’s bail was set to- you guessed it: $600,000 (which was reportedly the cost of damage to the store).
Now in addition to why anyone would use a BMW on a smash and grab run the other question in your mind has got to be why is this a “$600,000 Weapon”?
Well think about it, when is the last time you heard of someone driving a car through a window to get a hold of Google’s Droid? Or selling their kidney just to get their hands on a Nokia Lumina? Or waiting with baited breath outside in ridiculous lines to be one of the first to have a Samsung Galaxy?
You haven’t.
That is because Apple has what none of these other smartphone manufactures have: Fanaticism
No matter how much bigger another phone's screen size is, or how much more battery life it has, or how sweet (or fake) the camera is – it just won’t do, because people want an iPhone. This seemingly insatiable drive among the masses has made its products (and its shares) the “Apple” of many an investors’ eye.
How is This a Weapon?
To answer that question let’s look at it from a corporate viewpoint:
From a corporate standpoint the fact that having to advertise against the sheer force of “Apple Fanaticism” (or the “$600,000 Weapon”) is sure to drive up marketing costs. It has always been said that word of mouth is the best form of advertising, but for most smartphone makers getting consumers to just “stop talking about Apple for five seconds” is the best form of advertising. Some like Samsung have simply conceded to this fact and have cleverly just included Apple in its ads, comparing the iPhone 5 to its newest offering, the Galaxy III.
Will This Last Forever?
If we follow the advice of our teachers, and regard history as not to be subject to err in the future, than belief in Apple’s sovereign technological reign would be unwise. You’d need look no further than Sony’s “Walkman”, Research in Motion’s “Blackberry” and Microsoft’s (NASDAQ: MSFT) “Windows” (priorVista) to see that the shine of the technological crown fades.
You can see from the chart below that over the past year no company but Apple has really made any gains:
From the chart you can clearly see that this rate the only company with a chance to execute some comparative gains (without divine intervention) would be Microsoft. Their release of the Windows Phone (a little late if you ask me) and the soon to be Windows 8 product are possible catalysts for the mild mannered stock.
Note for all you Microsoft fans, you can get a look at the new Windows software and vie for a pre-release download here: http://windows.microsoft.com/en-US/windows-8/release-preview
Sum of the Chart
Each of these companies ruled in their day making headlines and stocks jump up at their every turn. So it indeed would not be smart to hang your hat on Apple as a never ending bet. However, grumbling from the sidelines and ignoring the tremendous profit opportunity that Apple’s shares provide (or ignoring the possibility of a Microsoft comeback) would be just as ill advised.
Foolish Bottom Line
While consumers wait in line for the latest offerings and discuss features around the water cooler, investors should not lose sight of the fact that smart buying opportunities abound no matter who is currently wearing the technological crown.
Know What You Own
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MindOverMarket has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Microsoft. 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.If you have questions about this post or the Fool’s blog network, click here for information.
