Edible Apple

Despite the upcoming launch of the iPhone OS 3.0 and rumors of a significant upgrade to the iPhone itself, Mike Abramsky of RBC remains cautious about Apple Stock, and is maintaining his “underperform” rating on the stock, along with his $70 price target.  Abramsky wrote in a note to clients that Apple isn’t likely to come out with a low-end iPhone, and that a price umbrella (to borrow a phrase from Tim Cook) might will eat into Apple’s market share.

It’s getting to a point, if we’re not there already, where it’s hard to take anything Abramsky says seriously.  I mean, today he says that there won’t be a cheaper entry level iPhone, but about a month and a half ago, Abramsky wrote that “checks reveal further entry-level iPhone details, including launches on existing carriers in June or July with a data plan, entry level pricing and a lower subsidy.”

Dude flip flops more than Andy Samberg on a boat.  And anyways, focusing exclusively on market share really misses the bigger picture.

I’ve said it before and I’ll say it again:  When it comes to stocks, the most important consideration is profitability, not market share!  Sure Apple could come out with a $79 iPhone and triple its market share, but that’s not going to make Apple any more money in the long run.  I really don’t get these analysts who are bearish on Apple for not releasing products that will do nothing to increase their bottom line.  Marketshare by itself means nothing.

Abramsky also writes:

Positively, the new features addresses iPhone’s major shortcomings vs. competitive platforms such as BlackBerry, Android and Windows Mobile, and may enable developers to create more innovative apps, however, in our view, the new features are evolutionary vs. revolutionary, sustaining momentum and developer interest vs. competitive platforms

Umm.. since when is sustaining momentum and developer interest a bad thing?  It’s not as if developer interest in the iPhone is lukewarm, and Apple is merely keeping that interest afloat.  On the contrary, developer interest in the iPhone is HUGE, is increasing, and the new iPhone SDK will only accelerate developer interest in the iPhone/iPod Touch platform even more.  Abramsky, in a way, almost insinuates this without even realizing this.  He writes that Apple’s latest iPhone OS upgrade will sustain “momentum“, meaning forward progress.  That’s the exact opposite of maintaining the status quo, which if true, would then lend some credibility to Abramsky’s statements.

Also, if I may rant for a second, can we all just stop using the “evolutionary vs. revolutionary” cliche now?  It’s the most overused phrase in tech writing, and while it has its place, I see it most often in places where writers/analysts don’t really know what else to say, and so they fall back on a tried and true cliche.  We get it.

Abramsky might be quite adept at crunching numbers and writing notes to investors, but when it comes to making a broad and accurate analysis of Apple in the marketplace, it seems obvious, to me at least, that his analytical skills are severely lacking.

So for all you folks keeping score at home right now, Apple is currently trading at $104.49.  Abramsky has a price target of $70 on Apple.  He gets paid to analyze this stuff.  I don’t.  Let’s see if Apple gets down to $70 anytime soon.

Like Jay-Z said, “Streets is Watching”