Apple, Samsung, Google and Microsoft and the big court ruling
Oh! do not attack me with your watch. A watch is always too fast or too slow. I cannot be dictated to by a watch. Jane Austen
Good morning and welcome back to the garden, where you need lots of sunshine, lots of water and lots of care to flourish.
The big news on the Street this morning is…wait for it…Apple. Apple’s big court victory of Samsung was pretty sweeping and powerful and clear. The billion dollar award is next to meaningless for a company like Apple that’s got 100x that much in the bank already, but the implications for all Android makers and the fear that they too are in violation of Apple patents is the most meaningful and long-lasting affect of the court case.
It’s pretty clear that Android and iOS and the tapscreen tricks that make them work are remarkably alike. I’ve had very iPhone from the beginning and I’ve also had about five different Android models. Before this ruling, Apple’s eco-system and its iOS smartphone/tablet operating systems were already just so seamless and easy to use vs. the Android/Windows combination. Now the Android and probably the Windows mobile operating system vendors are scared. Samsung didn’t expect to lose this broadly and this deeply on this ruling. And neither did Google. And don’t kid yourself that Everybody-But-Apple knows that they’re on the losing end of this verdict. Apple’s products and designs and software just got more unique.
Today’s trading action in Apple plays out exactly as I’d been expecting last Monday when I wrote:
Well, lots of fireworks with Apple today, as it busted through its all-time high on Friday and now is in all-out breakout mode. At least until it isn’t and then who knows if it’ll pull back 2% to 3%. And then who knows if at that point everybody will say it couldn’t sustain its breakout and then it’ll bottom. And then couldn’t you see it rally into the actual new iPhone release and then on into earnings. And then perhaps it will pull back after “disappointing” earnings, and then will bottom and head higher into the year end.
Cody back in real-time here. No change to the strategy, Apple remains my largest position even as I’d trimmed some near these levels last week.
On the other hand, I am a bit worried about what this verdict could mean to the Android vendor market. It’s not like the Android guys have much of an alternative since they can’t build on the Apple iOS, but they certainly have felt the earth tremble beneath their feet this weekend. Android’s got so much momentum and such a huge user and developer base already that this verdict won’t disrupt the overall arch of the business. But we will need to watch to see how the Android vendor base handles this verdict and if you see any of them start to move away from Android, we might might very well need to re-evaluate our Google position.
I wouldn’t make any other trades off this news either. I wouldn’t chase the Nokia even though the technicals and the chart look like this newfound momentum off its July lows could continue. The Windows system and the phones that Nokia’s delivering on it are just not catching any traction and I’m not sure this ruling is even a positive for these guys at all. Rather, if a lot of Samsung’s Android toys are illegally using technologies that Apple apparently has clear patent protection on, and the Windows/Nokia phones are increasingly looking and acting like the Android/iOS touchscreen platforms too, then I do think the Nokia/Windows guys should be worried about this verdict too.
Long ago, I was the first guy to put a $1000 price target on Apple, and I think you stick with this stock as it continues on that climb. This court victory is likely just another rung on that trillion dollar Apple ladder.