The Galaxy phone price you quoted is subsidized, the 600 isn't. Also, in terms of the Android operating system no one is making any money on it. For the long term sustainability someone has to. Also you mention the margins on the tablet and the phone, check the valuation on Apple's stock, the margins don't look so bad then???Apple has 2 major products under attack, the phone and tablet. The margins on their tablet will be first to go... then the phone will follow soon. There is simply too much competition. Would you pay 600 for an iPhone if you could get a top line Android phone for $250? Or a window Phone 8 for $250. Sure the iPhone is nice, already the Galaxy S3 is higher rated.. the pace in his industry is staggering.. if you look at the pace of development in the android custom rom market, these guys do a release every 10 days!!! This is orders of magnitude faster then Apple..
People that develop for android are motivated by other things. There are no shortage of great apps for android. The iphone has the same subsidies as S3 and others..but it's pricing power has already eroded. If you look a the tablet space where high quality 7" tablets are available for under $300...you can see iPad getting hammered in the not too distant future. S3's margins will also be eroded. I top end superphone will erode in non sub price to $300 within 12-18 months.The Galaxy phone price you quoted is subsidized, the 600 isn't. Also, in terms of the Android operating system no one is making any money on it. For the long term sustainability someone has to. Also you mention the margins on the tablet and the phone, check the valuation on Apple's stock, the margins don't look so bad then???
I think investors tend to confuse a good product (which the Android phone is) with a great stock (which Apple is).
On another post i mentioned the comparison of why Windows dominates the OS market and Oracle the database market. Alot of techies will tell you Linux is a better OS versus Windows but as a successful business Microsoft has trumped all Linux providers.
If you compare Goog and AAPL, AAPL has the higher growth rate, the lower multiples and even with hardware the margins look great. Google will have a margin compression once the Motorola numbers are combined.
Not saying one phone is better than another, just talking from an investment perspective.
Happy investing.
Goodguy
I hear what you are saying my friend. My point is from a valuation perspective Apple looks fantastic, they still sold out of the 5s and that will hit the bottom line. I'm not arguing the long term effects of each phone. I'm talking about trading the stock.People that develop for android are motivated by other things. There are no shortage of great apps for android. The iphone has the same subsidies as S3 and others..but it's pricing power has already eroded. If you look a the tablet space where high quality 7" tablets are available for under $300...you can see iPad getting hammered in the not too distant future. S3's margins will also be eroded. I top end superphone will erode in non sub price to $300 within 12-18 months.
You could easily get your face ripped off shorting the stock directly. I'd suggest expressing yourself with a bear put spread with options if that is your sentiment. Shorting the stock directly? Could run back up to over $700 before you can say "1 Mississippi 2 Mississippi". At least with options you get leverage and fixed risk.But if you feel so strongly about it go ahead and short the stock in the 620s...
OUCH!You could easily get your face ripped off shorting the stock directly. I'd suggest expressing yourself with a bear put spread with options if that is your sentiment. Shorting the stock directly? Could run back up to over $700 before you can say "1 Mississippi 2 Mississippi". At least with options you get leverage and fixed risk.
