Apple’s $3.4 Million Weapon
Jason is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Last year I informed you of Apple’s $600,000 Weapon.
Well, it just got an upgrade:
Across the tech world from Google's Android Devices, Microsoft’s Windows 8 toys, to Research in Motion’s BlackBerry 10 there is a common theme. Each has yet to utilize a “Weapon” like Cupertino.
Over the past few months this weapon has been on display in prime locations around the globe: everywhere from California to New York, and most recently in Paris.
This weapon has capability far beyond any features you'll find from Google’s Android and it can't be matched by Windows. With that said you’re probably thinking that the soon to be released Blackberry 10 will be a contender…
That’s because right now this weapon is Apple’s alone to wield.
The $3.5 Million Weapon
Due to recent events the $3.5 Million Dollar Weapon can best be described as “Apple Madness.”
Some investors might recall where it first struck…
In September 2012 an Apple store in California experienced “Apple Madness” head-on by way of a blue BMW that exploded through its doors and glass windows. The culprits then entered the Apple showroom with the vehicle and began grabbing as many iPhones and iPads as possible. Despite their efforts to escape in this smash & grab heist, an arrest was made. The driver’s bail was set to $600,000 (which was reportedly the cost of damage to the store).
Apple Madness struck again in 2012, this time the “Big Apple” was the target as Chris Dolmetsch of Bloomberg reported:
“More than $1.5 million worth of Apple (NASDAQ: AAPL) products were stolen from a cargo building at New York's John F. Kennedy International Airport that was the site of a 1978 heist memorialized in the movie "Goodfellas."
[The crime was reported by the New York Post], The thieves used one of the airport's forklifts to load two pallets of iPad minis, or about 3,600 devices, into a truck, the newspaper said, citing unidentified people in law enforcement.”
Then, just in time for 2013, Michael Grothaus of tuaw.com reported that “Apple Madness” arrived in Paris:
“…On New Year's Eve. Around 9:00 PM local time, four masked thieves broke into the Apple Store located near the Paris Opera and stole a lot of Apple goods, according to police. The police declined to say how much was stolen, but the number €1 million (about US$1.3 million) has been floating around the web.
According to BBC, Paris police said that the break-in was planned to coincide with New Year's Eve festivities as most of the police force would be patrolling the Champs-Elysées. No injuries were reported and the store had been closed for approximately three hours when the break-in occurred. There have been no arrests yet.”
Is it a Weapon or a Liability?
When you think about it, having massive amounts of your product snatched in elaborate and dim-witted heists initially sounds like a massive string of bad luck, but not when you put it into perspective. At the very least it is sure to drive up demand in the targeted region, due to lower product availability.
Additionally, it stands to drive up popularity: do you ever hear of people driving cars through windows to get a hold of Google’s Droid device (from any of the many store fronts where they are offered), or re-enacting a Hollywood heist to get a truck load of Microsoft Surface Tablets, or even sneaking around like the ‘Pink Panther’ in Paris for a Blackberry?
That is due to Apple producing what no other tech companies currently has: Crazed Fans.
“Apple Madness” is real.
If criminals across the globe want to get their grimy hands on Apple products so bad they are willing to risk jail time, how much more will hard-working upstanding citizens? Even now there are reports by Huffington Post of an iPhone 6, you and your portfolio would do well to believe that the “Good, the Bad & the Ugly” will want to get it into their hands.
What Can the Others Do?
The only thing other tech companies can do is simply play to their strengths:
Microsoft can stick to its guns and seek more exposure for Windows 8, it seems to be catching: Joel Clark of thepointdaily.com reports, “Windows 8 performed quite well in December and gained 0.66 percentage points to reach 1.77 percent from 1.11 percent, according to the recent market share data released by Net Applications. Similarly, Windows 7 managed to gain 0.66 percentage points to reach 1.77 percent from 1.11 percent during the last month.”
With earnings per share of $31.91 Google (NASDAQ: GOOG) is by far the most competitive of the pack, and it is also the most masterful at the art of making working connections, like it has done recently with Kia Motors. Aaron Esposo of thepointdaily.com reports that : “Google partnered with the Korean auto-maker, [Kia Motors] to add its mapping service and place services into the new UVO eServices telematics system of Kia, which will be used in the upcoming models later in 2013.”
Research in Motion (NASDAQ: BBRY) at this point needs all of its gunpowder in the barrel of the Blackberry10, due out this month. According to CNN Money’s David Goldman “The Waterloo, Ontario, company said it shipped just 6.9 million BlackBerry phones over the past three months, down from 7.4 million a year earlier. Research in Motion said it had 79 million subscribers last quarter, compared to 80 million in the prior quarter.” A strong market reception to the arrival of the Blackberry 10 would be great news for RIMM investors. Although its shares are sinking now, be on the lookout for some resemblance of life as the Blackberry10 release draws near.
Food for Thought
While “Apple Madness” is all the rage, investors should be on the lookout to draw as much profitability from the tech pack leader as they possibly can. Yet, they should not be so drawn into the madness that they forget the earning potential of all the “beta techs” clamoring for the alpha position; Google, Microsoft and even Research in Motion can still give investors a reason to howl at the moon.
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