Apple (AAPL) and Qualcomm (QCOM) ...
<< I was wondering if anyone thinks Apple now has characteristics of a gorilla? >>
Ain't no way. Not by Geoff Moore's definition of a "Gorilla" and not by a long shot ... and for many of the same reasons that Qualcomm NEVER was and NEVER will be a 'Gorilla'. Despite the fact that in the PC market where Apple enjoys less than 4% unit share globally (with higher revenue share) they have certainly reinvented themselves extremely well around the iTunes proprietary closed ecosystem that is the foundation of their Apple iPod/ITouch media player, iPhone smartphone, and iPad MID & PID/WID Mobile and Portable Internet play. It's also a component of the early stages of their Cloud Computing play where they are or will be one of several market leaders in a Gorillaless market.
Gorillas are market leaders with proprietary control of an open architecture and preferably have 2 times share of their next closest competitor. Other than in standalone media players iPod/iTouch (clearly a non-growth market segment) they are a not a market leader with 2 times sustainable share of their next closest competitor in any market segment.
Maybe a Godzilla? ... but Geoff never fleshed that Revised Edition Gorilla Game (the RFM) character out
<< After a decade of unsuccessfully watching and waiting for CDMA/3G hyper growth to boost QCOM's stock, I have been seriously thinking about moving out of QCOM and investing the proceeds in Apple. >>
Are you considering purchasing AAPL at an all time high using the proceeds from a sale of QCOM at its rather depressed price? That might turn out to be a sensible -- even great -- momentum play. Hard to say even with the substantial price targets we are seeing today from reasonably competent financial analysts.
Me? I'd wait for AAPL and the Naz to near a 52 week low to purchase but theft's me, not you. It's how I played AAPL -- nearly tripling the value of the average ($81) of my 3 original AAPL purchases made between October 6 2008 and March 9 2009 and before recently taking my original stake (only) off the table from profit generated in 2 equal chunks at $2O5 and then at $262 (average $234). Nice win and likewise so was ARMH, but GOOG, NOK, and QCOM in my digital convergence basket hasn't faired all that well in the similar period although all have increased nicely since Black Monday (March 9 2009),
As for hypergrowth, (by Geoff's definition) that period has come and gone for 'cdma based' technologies and particularly dead end CDMA2000 where they still have proprietary open control of a technologies architecture, even though non-proprietary open 3GSM WCDMA/HSPA will continue to enjoy decent growth (but not hypergrowth) for several years in unit subscriber connection terms and unit mobile device sales, but with lower revenue growth for mobile device or infra sales, as the market begins to prepares to move to nonproprietary open 3GPP and IEEE OFDMA based technologies.
<< Is it [AAPL] a buy? >>
Could be since their fundamentals are very good and they have enjoyed strong momentum and continue to generate substantial buzz around new products (iPad and upcoming next gen iPhone). Not for me, however, at today's price, but I'll hold AAPL through with my remaining pure profit position for the foreseeable future even if the Naz corrects sharply and they tumble somewhat with it, and I might add again when AAPL again approaches a 52 week low, even if that low is higher than today's 52 week low which I doubt it will be. .
IMO, Qualcomm (QCOM) was a momentum play in 1999 and again near its last decade low of ~$12 before the mobile wireless sector started to recover. Apple (AAPL) has been a momentum play (a very good one) for several years and since the iPod entered the Tornado. If you are a momentum player go for it. If you do, you might consider nibbling to build a position, rather than jumping in at an all time high. Likewise if you are going to fund that position from the sale of QCOM shares, you might reduce QCOM slowly rather than dumping and running. It's a quality company and they ARE the clear market leader in mobile wireless semiconductor logic revenue and royalty flow from IPR.
<< What happened to all our fine gorilla analysts? >>
Moved on and elsewhere and now applying other more meaningful investment analysis approaches no doubt.
In terms of evaluating AAPL as a potential tech investment (at today's price, or at any lower price), Moore's "Living on the Fault Line" and "Dealing with Darwin" (and likewise "Crossing the Chasm" and "Inside the Tornado" perhaps have more applicability than "The Gorilla Gane" even though they do not deal with investment theory. Trying to apply Gorilla Gaming theory to Apple and the segments it play in is a Fools Game, IMO..
All FWIW.
Best,.
- Eric - |
