H4cked Off: Buy Facebook, Dump Apple

By Stuart Sumner
05 Nov 2012 View Comments
stock market tete a tete

Indeed, in October Facebook was able to report that its mobile advertising revenue has increased faster than expected, causing the stock to climb by around 13 per cent. It's still low compared to its launch price, but the signs are there that the firm will eventually exceed its original value.

As for the big names selling up, that's not unusual, and could be for a variety of reasons, not least of all the fact that those with means like to spread their assets, and that means holding a variety of different investments. For example, Spillane may have sold millions of pounds worth of stock, but he kept roughly half of it. That is not the action of a man who believes his asset is on a nosedive to oblivion.

As for Apple, it has peaked. Where once it was releasing something new and genuinely ground-breaking seemingly at will, it now iterates just like everyone else. The iPod, iPhone and iPad were all innovative at launch, but really how much better or even necessary is the iPad 4 compared to the iPad 3? I have an iPad 2 and have absolutely no intention of upgrading.

Though the sales figures are still high, the iPad's market share is now decreasing as the competition begins to release cheaper products of equivalent technology. Where the iPad once ruled the roost as the most advanced tablet on the planet by a distance, now it vies with a multitude of capable offerings running Andoid – including the loss-leading Kindle Fire from Amazon – and an imminent swathe of devices running Windows 8, which is sure to capture a significant proportion of the enterprise market (which Apple still largely chooses to ignore).

Apple also has to contend with a vicious and running legal battle with Samsung. Its great victory in a Californian courtroom in August where its patent infringement case against the South Korean electronics giant was upheld grows increasingly Pyrrhic. Where once Apple was viewed with affection as the firm that makes the best toys, it is gradually being perceived more as a corporate bully.

Revelations this week that it uses various (entirely legal) avoidance schemes to pay two per cent corporation tax outside the US have not helped. And all this at a time when CEO Tim Cook tosses out several top-level execs in an attempt to make the company his own (and to punish those responsible for the Maps fiasco, many suspect).

A company at the top of its game releases products when they're ready, and not a moment before. It has the confidence to make its customers wait for perfection, knowing that the eventual release will fly off the shelves as quickly as it can be manufactured. That was old Apple. New Apple seeks to make as much money as possible from its remaining days at the top by releasing a dizzying conveyor belt of almost identical products.

Only two years since it was released, the original iPad has already been forgotten. Apple's latest mobile operating system, iOS 6, won't run on the iPad. Though its customers are loyal to the point of religious fervour, many are beginning to feel the rumblings of doubt.

So those are my reasons for exhorting anyone with a few spare pennies to buy Facebook and sell Apple. It really comes down to the old adage: buy low, sell high. Facebook is low now, it will be higher later. Apple is high now, it will be lower later. But don't take my word for it; let's come back to this in six months (unless I'm wrong, in which case this article will self-destruct).

Final word: I am not a financial expert, and if you take my advice, you do so at your own risk!

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