AT&T Joins the List of iKIllers

I could only chuckle a few months back when a guy called me an Apple Fanboy.  I am sure that many who have read my blog or tweets have thought this in the past, but this guy called me out.  Well – the facts are the facts. From 5/31/07 to 5/31/10, Apple’s stock is up 114%, while other mobile giants pale in comparison:  Research in Motion 9.6%, Google -2.5%, and Nokia -59%.  Apple Fanboy? “Money Making” Fanboy is more like it.

Mobile phones are very personal devices.  I believe that cellphones are as much as an expression of a person’s personality as the clothes they wear.  This close identity can become an investors achilles heel.  Research in Motion is a great company.  They make great phones, but the stock is down 27% over the past year. Unfortunately, it is difficult for many to separate the company from the stock. Love the phone, but hate the stock.

My “Long Apple Short iKillers” investment thesis strikes a nerve, because it is critical of many cellphone makers. Nokia, Research in Motion, Motorola, Google – I’m negative on all of them. Subpar crippling services like Adobe’s Flash, puts you on the list.  Matter of fact, I am finding it easier to find companies struggling with the transition to mobile than ones striving in the new paradigm (The Long Apple Short iKillers Trade is Working).

The buzz this week has been AT&T’s new data pricing plan.  It is replacing its unlimited plan with a tiered pricing plan.  My Twitter buddy Leigh Drogen has written an excellent analysis of the situation on his blog (It Was Inevitable).  Regardless of AT&T’s spin, it looks like prices are going up.  At the very least, usage patterns will be modified.

As consumers we always begrudge higher prices, but providing wireless services is a capital intense business. So, the higher prices may be justified.  That being said, the beauty of capitalism is that mispriced  services become an opportunity for someone. AT&T is already on shaky grounds with its questionable service quality.  My hope is that a creative company will come in and shake up the data delivery business.  Who is that company?  I have no idea, but AT&T is truly a company struggling at the transition – the definition of an iKiller.

Another great week for the Long Apple Short iKillers (LASiK) strategy.  Last week, LASiK was up 1.1% while the market was down 2.3%.

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