Apple announced an iPod today which appears to be simply a crippled iPhone and drastically cut prices on the iPhone itself. $299 gets you an iPhone, with no phone (i.e., the 8 GB iPod Touch); for another $100 (total $399, was $599), you can have the phone or another 8 GB (total 16 GB).
Ah, I think we ordered a few more parts than we’re actually gonna need, Steve. After the early adopters bought their phones, looks like it turned out that there weren’t all that many mainstream folks wanting a $599 phone with a big monthly bill to boot. Whacking the price by a third looks a little panicky to me. Added to which the other announcements were boring. Ringtones? Yawn.
At the end of the day, it’s down to a mature iPod concept and computers. Fortunately Windows Vista is such a POS that the computer business is doing well. But that doesn’t justify the huge stock price, I think. Also it might be a while before some of those flash makers that have been bid up huge on the basis of iPhone demand get another order, don’t you think?
Now as to the other horsemen – Amazon is selling at a 116 P/E in the face of an impending consumer recession, Google likely to be missing more than a bit of revenue from its mortgage pusher customers while continuing to spend money like water, and RIMM by all accounts busy stuffing the channel. What a joke. Just my opinion, of course.
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Since late 2004, AAPL has grown 1000%, it’s hard to get it perfect forever.
http://www.mercextra.com/blogs/vindu/2007/09/06/apple-ceo-steve-jobs-apologizes-to-early-iphone-buyers-and-offers-them-a-100-credit/
Apple has two things going for it; the biggest one is that it has had a successful second idea. That’s huge for a tech company. The other one is that it has a real design culture which could be a sustainable competitive advantage.
Those make Apple head-and-shoulders above Cramer’s other three picks. But they still don’t justify the price, given where it likely is in the product cycle.