Possibly the Worst SeekingAlpha Article Ever Written
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An article published on SeekingAlpha Monday may be the one of the worst things on the site in a while. The report, from TopEconomicArticles.com (maybe a play on words? Or bad pun?), claims that Apple's (Nasdaq: AAPL) iPad 3 is irrelevant for the company, and shouldn't be a consideration in investing in Apple stock.
The article contends that "The biggest moneymaker for Apple is not another version of a previous product, but the release of a new product line that overshadows the previous (e.g. iPod to iPhone to iPad)." By that logic, the millions upon millions of units of iPads, iPhones, and iPods, shouldn't matter.
Last quarter, Apple sold 33 million iOS devices, but only about 10 percent of those should count, according to TopEconomicArticles.com.
Further, though this article is bullish on Apple (we think?), it claims "The answer to [how well the iPad 3 will do depends] on how well Apple fares in China, where the market has not reached the same degree of saturation as the United States or Europe." Maybe, but analysts have been ever increasing estimates for iPad sales globally ever since there was an iPad. UBS currently thinks Apple will ship 37.9 million units in 2011 and 53 million in 2012, a near-40 percent growth rate.
Additionally, Hewlett-Packard (NYSE: HPQ), Reserach In Motion (Nasdaq: RIMM), Samsung, and others are dropping out like flies. Less competition is evident heading into the iPad 3 release, with multiple Google (Nasdsaq: GOOG) Android-based tablets providing no real competition.
Some solace from the author: "Apple's success with the iPad 1 and 2 doesn’t guarantee success for the third. But this shouldn't deter long term investors."
The author fails to see that Apple is currently on iPhone 4, which has also been selling like hotcakes and driving growth for the Company. It's iPod and iPod touch, while not the biggest contributors to revenue, add benefit through iTunes purchases and App Store sales. Those that don't own an Apple product (this author doesn't) are still amazed at the functionality and simplicity Apple products deliver. (This author was blown away by the iPad, and iPhone/iPod.)
Though $358 per share seems like a stiff price to pay, analysts regularly contend it's valuation doesn't come close to what the company is actually worth. Whispers of Apple becoming the first trillion-dollar company (it's current at $330 billion) are not a rare occurrence on the Street.
So, there was one useful bit from the article...a list of iPad 3 specs were pretty much current.
Finally, a few last words of encouragement from the article: "Apple's greatest capability is its unstable innovation force - the release of new product lines that overshadow the previous."
Nothing like unstable innovation to drive a stock higher.
Apple is modestly higher on Monday's trading session.
Note: SeekingAlpha has many intelligent and current bloggers who work/live/breathe/eat in finance and the markets, providing useful advice for those willing to do their own homework as well. This article was definitely an outlier. It was overall confusing, basically saying the iPad 3 might bomb, but buy Apple anyway. Maybe.
Note #2: The writer of this Streetinsider article is not an Apple analyst.
Note #3: The writer of this Streetinsider article holds no Apple stock, and doesn't plan to buy any anytime soon.
The article contends that "The biggest moneymaker for Apple is not another version of a previous product, but the release of a new product line that overshadows the previous (e.g. iPod to iPhone to iPad)." By that logic, the millions upon millions of units of iPads, iPhones, and iPods, shouldn't matter.
Last quarter, Apple sold 33 million iOS devices, but only about 10 percent of those should count, according to TopEconomicArticles.com.
Further, though this article is bullish on Apple (we think?), it claims "The answer to [how well the iPad 3 will do depends] on how well Apple fares in China, where the market has not reached the same degree of saturation as the United States or Europe." Maybe, but analysts have been ever increasing estimates for iPad sales globally ever since there was an iPad. UBS currently thinks Apple will ship 37.9 million units in 2011 and 53 million in 2012, a near-40 percent growth rate.
Additionally, Hewlett-Packard (NYSE: HPQ), Reserach In Motion (Nasdaq: RIMM), Samsung, and others are dropping out like flies. Less competition is evident heading into the iPad 3 release, with multiple Google (Nasdsaq: GOOG) Android-based tablets providing no real competition.
Some solace from the author: "Apple's success with the iPad 1 and 2 doesn’t guarantee success for the third. But this shouldn't deter long term investors."
The author fails to see that Apple is currently on iPhone 4, which has also been selling like hotcakes and driving growth for the Company. It's iPod and iPod touch, while not the biggest contributors to revenue, add benefit through iTunes purchases and App Store sales. Those that don't own an Apple product (this author doesn't) are still amazed at the functionality and simplicity Apple products deliver. (This author was blown away by the iPad, and iPhone/iPod.)
Though $358 per share seems like a stiff price to pay, analysts regularly contend it's valuation doesn't come close to what the company is actually worth. Whispers of Apple becoming the first trillion-dollar company (it's current at $330 billion) are not a rare occurrence on the Street.
So, there was one useful bit from the article...a list of iPad 3 specs were pretty much current.
Finally, a few last words of encouragement from the article: "Apple's greatest capability is its unstable innovation force - the release of new product lines that overshadow the previous."
Nothing like unstable innovation to drive a stock higher.
Apple is modestly higher on Monday's trading session.
Note: SeekingAlpha has many intelligent and current bloggers who work/live/breathe/eat in finance and the markets, providing useful advice for those willing to do their own homework as well. This article was definitely an outlier. It was overall confusing, basically saying the iPad 3 might bomb, but buy Apple anyway. Maybe.
Note #2: The writer of this Streetinsider article is not an Apple analyst.
Note #3: The writer of this Streetinsider article holds no Apple stock, and doesn't plan to buy any anytime soon.
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