Apple’s (AAPL) Steve Jobs launches attack on Google (GOOG)

By: ispeculatornew
Date posted: 10.19.2010 (5:00 am) | Write a Comment  (0 Comments)

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Yesterday as most of you know, we opened a new trade on Apple (AAPL) and Travelzoo (TZOO) and had indicated that we were a bit nervous to open our position a few hours ahead of Apple’s earnings. We received a comment from someone who seemed concerned when Apple’s stock lost some value. Don’t worry too much though. That loss came compared with yesterday’s close. I had opened the position at the open, at $307.44. So the trading after hours was a loss of less than 2%, not dramatic by any means and certainly a “relief” for our fears.

Apple had a big beat on earnings and revenues thanks mostly to what turned out to be a 91% increase in year over year Iphone sales. The big reason for the stock losing value was a miss on the number of Ipads that were sold during the last quarter. Numbers are incredible by any measure.. any measure except the incredible expectations that is. The growth remains spectacular and it does seem like Apple has created a new line of winning products after the Mac computers, the Ipod’s and the Iphones.

One aspect that turned out to be very interesting was the presence of Steve Jobs on the conference call, something that usually does not happen. Why was he on the line? It seemed to be clearly about 2 big issues.

-Iphone is #1 – Steve Jobs made a clear attack on Research in Motion calling it basically a company of the past, that was behind Apple in what is its only product and clearly saying that RIMM would not catch up. Then, Steve Jobs made a clear attack on Google’s Android. Why? Because it seems like Google seems to try to give the impression that they are on their way to #1 in terms of market share. Steve Jobs said that they had lost the battle of units shipped in the 2nd quarter but he believes that Apple’s approach is far superior. Having an “open” product means that every carrier can add proprietary software which can complicate things tremendously. He gave the example of the Tweetdeck application which had to work on hundreds of different user interfaces when upgrading its application. That problem does not occur on Apple’s Iphone. It also said Apple was currently activating over 275,000 users per day, 75,000 more than the most recent estimates that Google announced.

Ipad competition: Steve Jobs crushed the competition that is preparing Ipad competitors saying their products would be DOA “Dead on Arrival”. Why so? Because the smaller screen will result, according to Apple’s research in far worse user experience. I agree with Jobs 100% here. I think that competitors who have recently started looking at producing a tablet, such as Research in Motion’s Playbook, are not just months behind in terms of production but also years behind in terms of the thinking & research. That is significant and I’ve been saying it for a long time on this blog.

Why was Steve Jobs on the call? Is it a good sign?

I loved having Steve Jobs on the call, his company has been under attack from the best tech companies in the world and it seems like lately they have been trying to use questionable facts to wage that war. It’s not a surprise of course as Apple continues to dominate in most of its products and gain market share quickly in its others. They do have more planned in the near future and given its recent track record, I think Apple can keep up the growth for some time now…

Still optimistic about Apple’s stock?

Yes, absolutely, I am happy that the earnings period is over and more than happy to be long Apple at its current valuation. How about you?

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