Jim Cramer’s Data Adds Meat to My iKiller Thesis Bones
miked | Jun 20, 2010 | Comments 0
A misguided notion that somehow more is always better.
The tech heads continue whining about missing features in Apple products. No Flash support. No multi-tasking. No this. No that. I was an engineer. I have a BSEE and MSEE. Trust me – there has never been a product released, in history, where an engineer didn’t want to add one more thing.
Apple is one of the few tech companies that has mastered the current feature and future enhancement mix. Its reward – the company sold 2 million iPads in 2 months. Last week their servers were overwhelmed by the demand to pre-order the iPhone 4.
What’s the competition’s response? This week Motorola will announce its next version of its Droid phone. One of its big selling points will be Flash support – a perceived Apple weakness. I am sure some one will be excited, but I guarantee their systems will have no problem handling the pre-orders.
As long as the competition continues attacking Apple using a “We have a missing feature” approach, my Long Apple Short iKillers thesis will continue to work (The Long Apple Short iKillers Trade is Working).
An iKiller is any company claiming to have a iPod, iPhone or iPad killer or has an Apple crippling service such as Adobe’s Flash or AT&T’s new Data Plan (AT&T Joins the List of iKillers).
I didn’t realize how powerful this thesis was until CNBC’s Jim Cramer put some market cap data behind it (The Street):
- Since Apple launched it’s iPad earlier this year,competitors Amazon.com, Adobe, Hewlett-Packard and Dell have lost $456 billion in market cap.
- Since launching the iPhone, traditional phone makers Nokia and Motorola have been in a tailspin, losing $96 billion in market cap.
- And even in the smartphone space, new and established competitors like Research in Motion, Palm and Google have lost $40 billion in their combined valuations.
- These loses total $192 billion in lost market cap. During the same time, Apple has seen its market cap increase by $139 billion.
In other words, Long Apple ( +$139 billion market cap) and Short iKillers ( -$192 billion market cap).
Filed Under: Trading School
