The Macalope Daily: The moral of the story
The Macalope knew that last Friday’s big win for Apple in its suit against Samsung would bring out a lot of craaaaazy “analysis,” and boy, he was right.
Today’s example comes from MoneyWeek’s Phil Oakley, who finds that the true lesson to be learned from this is that “Apple will lose the smartphone war: it’s time to sell” (tip o’ the antlers to Ameya Bhagwat).
Investment types will never get tired of writing this piece. That is a fact. Hey, maybe this is some kind of improvement. After all, Oakley says Apple “will lose,” while many others insist it already has.
…far from being good for Apple, last Friday’s events may have revealed its Achilles’ heel - it’s simply too dependent on the iPhone.
There’s no doubt that the iPhone is Apple’s biggest business, not that it doesn’t make a lot of money selling iPads, Macs and even still iPods. So maybe it’s a good thing that the company, you know, won its case against Samsung instead of a bad thing? Just thinking out loud.
The real lesson for investors from the Apple-Samsung battle is this: companies are only as strong as their moats.
Seriously? Apple just added a bunch of crocodiles mounted with spear guns manned by angry badgers to its moat, and you want people to sell.
So who genuinely has the strongest moat in the world of smartphones, tablets and the internet? I’d say it’s Google - and Apple knows this. Google effectively owns the internet and the source of its profits - advertising revenue.
Kids, always choose your investments based on trite platitudes and oversimplifications.
The Macalope will just point out here that analysts suggest Google’s mobile ad revenues could get as high as $5.8 billion this year. Apple, by contrast, only made $16 billion in iPhone sales …
… last quarter.
Apple is trying to move away from Google by removing YouTube and Google Maps from its operating software.
But can it do without Google search?
We did this already. Who is dependent on who here? Remember that two-thirds of Google’s mobile ad revenue comes from the iPhone (some say it’s even more). Is Google supposedly going to refuse to let Apple use its search on iPhones and iPads? After the Motorola deal, does it really have that much left of its own face that it can cut off in spite?
More importantly, can Apple keep charging high prices to tie people to its products? We don’t think it can. That’s why it may be time to sell Apple shares and buy Google (Nasdaq: GOOG) instead.
Right. Don’t invest in a company that’s making gobs and gobs of money selling smartphones. Invest in a company that makes a pittance on mobile advertising, mostly from the devices made by the company making gobs of cash.
The Macalope has consistently said you shouldn’t take financial advice from a cartoon of a mythical man/antelope/Mac hybrid. But, really, you shouldn’t take advice from Oakley, either, cartoon or not.
[Editors’ Note: In addition to being a mythical beast, the Macalope is not an employee of Macworld. As a result, the Macalope is always free to criticize any media organization. Even ours.]