iBooyah.com Investment Matters

Where will Apple stock be in a few months?  In my opinion, it is difficult to tell at this point.  The question here is whether big investors will sell on the news and leave the poor individual traders holding the bag. It is my opinion large institutional investors will likely sell and lock in their gains next week after the product has been on the market for a few days. Jumping in now and hoping for additional appreciation is risky as the market has already priced in the expected revenue from the product. My plan is to watch this one from the sidelines.

While I believed the demand will be strong, I do not foresee people actually buying it as much as some are predicting.  The primary reason for my negative view is the steep price.  I’m sure it will cause a lot of curiosity and the stores will likely be packed, but that does not necessary mean people will buy it. Breaking down the cost, the hardware itself is about $600.  Then you have the monthly service plan (it’s a two year contract, by the way).  The service cost ranges from $60 to $120 per month.  Don’t forget the activation fee.  By my estimates, the total cost of owning an iPhone in the first two year is about $3000. That is ridiculously expensive to be a beta customer.  Beta customer! Yes. That is what it amounts to. Early adopters are playing to be beta customers, make no mistake about it; expect to run into bugs with the software and hardware.