Reading the Tea Leaves and Cerner
Reading the tea leaves, I notice the following
Alcon – Down 5% in just 3 days. 7% off its high. No news amid heavy trading.
Gilead – 6% off its high. No real news and trading is formidable. Looks like we are hovering between $50~$54 until real news.
Cerner – I mentioned last week that Cerner looked like it was slowing down. We hit our stop loss of $93. Cerner hit a high of $98 before getting downgraded and falling ~10%. We may buy back in if there is more weakness. We netted 5.7% on this investment.
JetBlue – Lately it has been touching $19 and backing off. I take that as a sign of better things to come.
In general, I am seeing a lot of softening in all stocks that I track.
Apple and Hansen puts – Well, I waited too long to move. Hansen was down $7 this morning. Apple was downgraded yesterday.
Love Apple, Hate the Stock Price
Before the iPOD, before music went digital with flash players, there was the Walkman. An estimated 200M units were sold worldwide over 10 years until sales began slipping after market maturation. Sales continue today around 10M units annually.
I believe price is the biggest obstacle to reaching 200M unit sales. Walkmen are <$100, iPODs are $300~$400. They would be cheaper but they include an I-AM-COOL tax by Apple.
I believe Apple will crack 10M unit sales this holiday quarter. That makes it close to 45M units sold to unique users (there are a few million multiple or repeat users). I believe that the high-end market is maybe 150M users, and Apple has already hit ~30% of that market. If sales continue at the 10M+ quarterly pace, Apple will have saturated the market in 2 years. That also assumes that no-one else will offer a rival product.
If Apple can drive greater convergence so that the iPOD is more than a mobile audio player, then there is more opportunity. With a tiny screen and weak battery life, I don’t see the video iPOD as a portable DVD player killer. But as a DVD & TV library , there is a lot here. In the next year, a 100GB iPOD will be standard, with 150GB+ on the horizon. That’s enough for a complete music and DVD library (100~130 movies). Throw in TV shows, and you can replace the TiVo. Now is it worth $400?
Well, that’s the problem – after awhile, iPOD really is just a portable hard drive with a nice GUI. Anyone can enter the market. A 1.8” 60GB hard drive retails for $130 today. That $400 iPOD is probably $150 in parts and dropping.
To drive value, Apple is driving content access. Hollywood and TV land are playing ball. But as soon as another player enters, it will be a free for all. And people will stop lining to pay Apple’s I-AM-COOL tax.
Alcon – Down 5% in just 3 days. 7% off its high. No news amid heavy trading.
Gilead – 6% off its high. No real news and trading is formidable. Looks like we are hovering between $50~$54 until real news.
Cerner – I mentioned last week that Cerner looked like it was slowing down. We hit our stop loss of $93. Cerner hit a high of $98 before getting downgraded and falling ~10%. We may buy back in if there is more weakness. We netted 5.7% on this investment.
JetBlue – Lately it has been touching $19 and backing off. I take that as a sign of better things to come.
In general, I am seeing a lot of softening in all stocks that I track.
Apple and Hansen puts – Well, I waited too long to move. Hansen was down $7 this morning. Apple was downgraded yesterday.
Love Apple, Hate the Stock Price
Before the iPOD, before music went digital with flash players, there was the Walkman. An estimated 200M units were sold worldwide over 10 years until sales began slipping after market maturation. Sales continue today around 10M units annually.
I believe price is the biggest obstacle to reaching 200M unit sales. Walkmen are <$100, iPODs are $300~$400. They would be cheaper but they include an I-AM-COOL tax by Apple.
I believe Apple will crack 10M unit sales this holiday quarter. That makes it close to 45M units sold to unique users (there are a few million multiple or repeat users). I believe that the high-end market is maybe 150M users, and Apple has already hit ~30% of that market. If sales continue at the 10M+ quarterly pace, Apple will have saturated the market in 2 years. That also assumes that no-one else will offer a rival product.
If Apple can drive greater convergence so that the iPOD is more than a mobile audio player, then there is more opportunity. With a tiny screen and weak battery life, I don’t see the video iPOD as a portable DVD player killer. But as a DVD & TV library , there is a lot here. In the next year, a 100GB iPOD will be standard, with 150GB+ on the horizon. That’s enough for a complete music and DVD library (100~130 movies). Throw in TV shows, and you can replace the TiVo. Now is it worth $400?
Well, that’s the problem – after awhile, iPOD really is just a portable hard drive with a nice GUI. Anyone can enter the market. A 1.8” 60GB hard drive retails for $130 today. That $400 iPOD is probably $150 in parts and dropping.
To drive value, Apple is driving content access. Hollywood and TV land are playing ball. But as soon as another player enters, it will be a free for all. And people will stop lining to pay Apple’s I-AM-COOL tax.
posted by Andrew at
8:21 AM
2 Comments:
I've bookmaarked your page and read it a few times...I recently began a "virtual portfolio" and have been riding quite well. My portfolio contains companies I am familiar with, and clients to. EG: ebay, Google, Panera bread, Borders, Lowes. So far I have managed a 4% net return is 20 days.
Anyays, I also have a blog that may interest you...I liked your deemed "I am so cool" tax on Apple products. You may enjoy my most recent article "iSnob, therefore iPod"
Check it out
VL
Thanks for your kind comments.
iSnob....heh
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