Model Portfolio eugeneg:EMF

Yet another year has come and gone; so what did we learn for 2009? 2009 was a year for market recovery, and record earnings. However most of these records were on the backs of massive layoffs, bottom line cuts and massive sell offs of divisions (AIG). However, one of a few companies that created actual growth was Apple, Inc. Apple in its drive to stay number one in the mobile phone market, number one in mp3 players, and number one among students using computers and even breaking into the business market with their I-server, has been coming out with newer products. Namely the new iPhone 3GS, and the iPAD, should help Apple stay ahead in the tech market.

The new iPhone 3Gs, is a great improvement over the older iPhone, it has better internal processing speed, a video camera, and GPS. The older iPhone's had some lagging issues, and its competitors like RIM and HTC, were producing phones with built in GPS and video cameras, plus quicker processors. It seemed like people were starting to pay attention to its competitors because of these developments. So Apple upgraded its phone to keep its market edge. The new phone has even made me switch from T-mobile just to get it, because I am very unsatisfied with my Google phone. I can tell you from my experiences with the Google phone, it crashes way too often, and too many "force closes." Which I believe is caused by the fact of the open platform that Android uses to help create new apps. This idea is all well and good, but the problem lies with poor over site of the programs being released on the Android marketplace. Google is not testing them to make sure they work properly with the Android operating system, causing a lot of conflicts within the system software. The infinitely better Mac OSX based platform that was used is the driving reason why it's so successful. Additionally, Apple vets all new application being sold on the Apps market place, making sure they function properly. Due to Apple's innovative thinking, and its marketing strategy has made the iPhone a game changer in the market place. Apple's biggest competition will come from HTC, in the form of the Google Nexus One, its processor is faster than the iPhone 3GS and has a higher pixel camera, and was built to the exact specifications of Google. There has been talk that the Nexus one does things better than the iPone primarily the apps, but I think that I covered the pluses and minus of an open system with no over site as to apps development. However, there will be those purists who will argue that an open system is the best way to spurn app development, but they don't seem to want to admit is that there are a lot more terrible useless apps being developed by the Android marketplace because of that. That being said, this should make the Nexus One a worthy adversary for the 3GS.

Another competitor to Apple would be RIM, but their smart phones, did begin the smart phone craze have fallen behind. Some analyst who cover RIM say that the people who buy Blackberry's are looking for enterprise and messaging, but the new iPhone has given the ability to link Microsoft enterprise email to the iPhone. Basically, the only system that I know of that it's not compatible is Lotus Notes, but don't get me started on the sheer cumbersomeness of Lotus Notes. I believe that the 3GS can easily compete with RIM in the business marketplace.

People have been awaiting the release of Apple's tablet PC for sometime. The general consensus is that iPad is no different than any other tablet PC. It is definitely not the innovation people had been expecting, but since this is from Apple, people are scrambling to be the first of their friends to get one.

I decided to speak to Apple directly and get the skinny on the IPAD. From what I was able to elicit, the IPAD would make carrying a pad of paper around a thing of the past. This would be helpful for Drs, Teachers, students, or just about anyone that takes notes. Since the screen is all of ten inches, and is as thin as your laptop screen, carrying it in your briefcase would not be hard. Apparently, there is some talk of a medical application that would allow Nurses to carry it and see all the notes made about a certain patient. Even though it is not as high powered as a laptop, it was not designed for that, it was designed to actually be a virtual work place. The iPad would be the first open sourced mobile computing system out there. You could log on to the App Store and download a program that would help you track shipments, or manage your company's credit card transactions. There would be no need to buy expensive software with 20 different programs, when you were only looking for one specific one. You could just buy the one you need and save some money. Since there is an attachable keyboard that is in development at this time (ships late April), it would make tying out documents on the go that much easier. There would be no need for bulky laptops when you don't need one. The first generation, which is due out shortly, will be WIFI only, but sometime in the summer a 3G version will be rolled out, which will allow you to browse the Internet anywhere there is a cell signal. Plus, there will be no contract for this service; it will be strictly month-to-month.

The stock has been on a tear sine bottoming out at $82.33 back on Jan 19, 2009, it is trading at all time highs of over $235.00/share. If you had gotten in at that price you made a killing, but even if you went through the ride, then you have recovered and made even more. The outlook for Apple is still a wait and see, because of the iPad and how it will fair in the market. If you are holding Apple, hold on to it, if you are considering buying I would hold off until you see the results of the IPAD. I believe that the P/E at nearly 23 is too high and the stock might be over valued and be approaching speculation. From what we have been so painfully taught, that what goes up must come down, there might be a 10-15% pull back before the stock runs up again. If one were too pure look at the numbers, they are staggering, between March 9, 2009 and March 9, 2010, the stock has returned about 168%, and that is about 18% higher than it was in late 2007, before this recent correction. All rational indications would be that it couldn't sustain this run. There needs to be a healthy cooling off period and a correction to bring down its P/E. Apple in general is a solid company that helps innovate the market place, and drive better and better products. Without Apple there wouldn't be much of technology revolution. I believe that Apple is keen on keeping ahead of the curve and to that end they keep pushing the envelope with existing products and creating new ones.