Apple AAPL-Q -- purveyor of hip, the gadget maker with the golden touch -- has seen its stock price hit two new highs in the past week. In fact, Apple has been on a winning streak for the past decade, ever since its audacious co-founder Steve Jobs reclaimed the top post. Apple's long ride atop the pinnacle of cool has a can't-miss quality to it; a gravity-defying feel of permanence.
But beware of the backlash. While hard to picture now, Mr. Jobs and company will one day, maybe soon, fall out of step with fashion. Growth will stall. Fair-weather investors will flee to sunnier stocks. Loyal fans will become embittered. Smelling blood, critics will get even nastier.
It's inevitable. The life cycle of tech giants is brilliant and brutally short. Today's consumer electronics leaders are tomorrow's fossils. In the 1970s, Atari was considered infallible, bringing video games out of the arcade and into the home with joysticks and consoles. But by the 80s, rivals Sega and Nintendo got the hot hand, and Atari was deemed uncool.
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Thinking of investing in Apple?
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Cool is the whipped confection that Mr. Jobs has built the Apple kingdom on, but even the sweetest empires fall.
Apple shares have had a tremendous run, and here are three reasons to sell the stock and bank your gains.
A still from one of Apple's classic "I'm a Mac/I'm a PC" ads
1 - Macs
When the Microsoft MSFT-Q-powered PC industry became bogged down under the weight of Windows Vista and virtual pounds of bloatware and spyware, Apple Macs hit their stride as a sleek, simple, bug-free alternative. But today, thanks to a more stable Windows 7 operating system that borrows some good looks from Apple, PCs aren't so bad anymore. The rush to convert to Macs has quieted down thanks in part to a bevy of improved PCs.
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Apple's market share slipped slightly in the fourth quarter to 7.5 per cent from the 7.7 per cent level it held in the year-ago period, according to Gartner. A big hurdle to Apple's mass market success is its incompatibility with PC software, but an even bigger barrier is the shocking contrast in prices. You can buy two PCs for the price of one Mac. According to Technology Business Research, the average Mac goes for $1,309 (U.S.), while the average PC goes for $570.
In this July 21, 2009 file photo, a customer displays an Apple iPhone 3GS at an Apple store in Palo Alto, Calif.— AP
2 - iPhone
The third year is a charm. The fourth year will wear thin. Apple's 4th version of the iPhone -- not to be confused with a 4G iPhone -- is due this summer, and it's not likely to be any different than the past three.
Meanwhile, thinner phones have arrived like Google's GOOG-Q Nexus One, and bigger, brighter screens from the Motorola MOT-N Droid have beaten Apple at its own game. No wonder why Apple fought back last week, charging Android phone maker HTC with patent violations.
Current speculation holds that the new iPhone will have a user-facing camera for video calls. One thing it won't have: Verizon, the nation's biggest wireless camp with some 91.2 million customers. AT&T (T) seems to have extended its exclusive iPhone selling agreement through the end of the year, delaying the liftoff of the Verizon iPhone.
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