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Don

I don't think the problem is that investors are idiots. The sad fact is that the price of Apple shares has gone up so high that few independent investors can afford it. That means most of the investments are being done by large firms with decisions for buying and selling being controlled by computers.

IMO, then, there is a two-part solution:
1) Apple should do a stock split of at least 3 for 1. 5 for 1 would be better.
2) If this happens there would be a massive influx of actual investors rather than computer-managed dogma (followed by "me too!" fund managers), however they have to learn that tech "analysts" are nothing more than carnival fortune tellers without the accuracy or the ethics.

John

I'm also long and have thought about this a lot. Part of the issue is psychology. People are very risk averse. They are more afraid of losing a dollar than they are attracted by the chance of gaining a dollar. In that respect Apple has already won so the fear is that someone will come along and take their place. Amazon has nothing so there is nothing to lose. It is all hope that someday they'll figure out how to make a profit. Google has a monopoly on search. No one is going to challenge them on that.

People talk about slowing iPhone sales yet iPhone sales are up by a huge amount. The problem is they can't make them fast enough.

Maybe one solution would be to make more iPhone models. If there were a phablet, the regular phone and some sort of low end phone the releases could be staggered throughout the year making it easier for the factories to ramp up volume. They sold almost 50 million phones in the quarter. That problem is only going to get worse going forward.

Perhaps this would help investors. There wouldn't be just one target to focus on as there would be iPhone releases several times per year.

Mark Sigal

I think that you are right that people are more afraid of losing money than making it; namely, because the low of losing is lower than the high of winning.

Similarly, there is the dual truism that: A) it's easier to sell a story about potential than reality; and B) people like simple narratives that support their conventional wisdom.

The conventional narrative is that free or low margin always wins in tech, and that being horizontal vs. vertical always wins.

Thus, it's easy to see how people gravitate to the Google and Amazon narratives.

I personally think that Apple will segment that iPhone the same way they did the mini, perhaps a different form factor than iPhone 5.

But then again, a key difference with the iPhone space is that it's backed by a carrier subsidy so "to consumer" pricing is anything from not that high (iPhone 5) to $99 (iPhone 4S) to Free (iPhone 4).

That's not a bad segmentation story, IMHO, so maybe it's unnecessary.

Mark Sigal

@Don, there is truth in what you say, but splits are cosmetic and artificial and that's not how Apple historically has rolled. It's like saying, people would buy more pizza if it was cut into 16 $2 slices vs. 8 $4 ones. You may feel better having two slices of $2 pizza versus one larger slice, but fundamentally it's the same amount of pizza. Obviously, I am not blind to the psychology, though.

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