Not a bad’s day work for any company.
You could have once described Apple (AAPL) as a niche company that produced cool products for a tiny sliver of the market. No more. On Monday, August 3, Apple demonstrated that although it may not have the market share of a Microsoft (MSFT), Google (GOOG), Hewlett-Packard (HPQ), or a Nokia (NOK), increasingly the company picks the tune that the elephants dance to.
For example, Apple announced that Eric Schmidt, Google’s (GOOG) CEO, had resigned from Apple’s board of directors. Schmidt had ben a member of Apple’s board since 2006. But no more. With Apple set to go head to head with Google in the browser market–where Google has just introduced Chrome to go against Apple’s Safari browser–and in the cell phone market–where Google’s Android operating systemn will go up against Apple’s iPhone–no way that Schmidt could keep his seat on the board.
Sure, he could recuse himself every time a senstive competitive issue came up but on current trend Schmidt would have spent most of Apple board meetings out in the hall.
Schmidt’s presence on Apple’s board got trickier last week when Google announced that Apple had rejected a Google app (application) for the iPhone that would have let users make free calls and text messages.
And that was just the beginning of Apple’s Monday.
Barron’s Online and the Financial Times reported that same day that Apple does indeed have the long-anticipated tablet computer in the works. The machine, with a 10-inch screen, would be Apple’s entry into the very hot netbook or smaller-than-laptop market segment. Rumor says look for a September announcement with a November release–just in time for the Christmas shopping season.
The rumor has, according to Barron’s and the Financial Times, frozen a good part of the computer industry in place.  Nobody wants to design a competing product until they see what Apple has come up with. You can bet that CEOs at Lenova and other PC makers, and at the Asian original device makers (ODMs) that now design and manufacture so much of the world’s supply of computers are spending their nights tossing and turning as they wonder what Apple will come up with. Rumor pegs the price of the Apple device at a premium (of course) $699 to $799.
And no day would be complete without news of a counterattack on the iPhone from Motorola (MOT), Palm (PALM), and Research In Motion (RIMM). According to Collins Stewart, Motorola’s Android-based phones would join Palm’s Pre (and lower end Pixie) in trying to take back mindshare that now belongs to Apple. Research In Motion is said to be launching a new lower cost Curve.
Should make for interesting Christmas shopping, anyway.
Hi Jim,
I am new at this site. Unless i have missed it, i am clear as to why you are not recommending Research in Motion (RIMM). This company seems to deliver in the long run and has a way of deliverying great products. Any comments. thanks
Hi Jim,
Thanks for your blogs and commentary, great stuff. You do not have AAPL as your pick. Are you thinking of adding it anytime soon? Also what are your thoughts on the target price for AAPL and timeframe to reach that price ?
On a separate note, I have FSUMF at a higher price than your target price of $6; would like to know your thoughts if buying more FSUMF at the current price would be a good idea.
Thanks for the response. I didn’t explain my idea well enough. Here is an example of what I’m thinking. EEP is paying about 2% per quarter at the current price. It is down over 4% today. I’m thinking of foregoing the dividend and selling the day before the ex-dividend date and buying back on the ex-dividend date (not collecting the dividend). I would have came out well ahead on OKS and EEP this quarter. I’ll watch to see what happens to ETP tomorrow.
You’re seeing the effects of dividend capture stratgegies being executed by large investors. It’s a prety well established pattern. Got to be careful, though, that you execute your trades so that you capture the dividend. Might want to try one before going whole hog and certainly talk to your broker about execution on this strategy.
Hi Jim,
Love the site. I’ve noticed something with EEP, ETP, and OKS recently. They all get hit hard on the ex-dividend date. The decline I’ve been seeing is larger than the payout. I’m curious if you have seen this long term. If so, it seems like it may be a good bet to sell prior the day prior to the ex date and buy back in the next day.