What is AAPL trading on? Is it earnings? Is it the Tablet? Is it the future? Reading the unbelievably good GOOG piece by Morgan Stanley this weekend, I was struck by the amazing Mary Meeker analysis about how Apple is not making phones, it is making home entertainment gadgets that the next generation loves, and the key to it is iTunes. (Amazing that this was in a Google piece.)
I have no idea what the quarter will be. It should be very strong, given that its whole lineup seemed to be selling like hotcakes around the world.
But what was so incredible about the Meeker view is that this new device seems to be so in synch with those who watch TV on their iPod but feel the quality just doesn't get there.
iTunes is going to take over the intellectual property of video the way it took over the intellectual property of music. Some of it is on the iPhone and some of it is on the iPod, but the remainder very well could be on the iTablet or whatever they care going to call it. Apple has figured out that the two things the people hate are 1. Being told when to watch, and 2., having to watch commercials, which they hate. Commercials are just hated.
This device could answer that.
In jeopardy, of course, are the cable companies. Other than sports, why would anyone buy cable -- the thinking goes -- when they can pay $20 a month for the shows that they really like? Most people don't sit there and watch TV every minute.
Those who do watch TV will also play video games, and who knows what Apple has in store for them? Perhaps the easiest way to download them.
So, let's put the quarter in the context. Maybe this is the last iTablet-less quarter, and the selloff this market keeps giving you is the opportunity to buy thus one sans what Steve Jobs is calling a remarkable device.
Just keep it in mind if you are "trading" Apple. May make no sense if you read Meeker's Google report.....
long AAPL, GOOG
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