Many people think Apple is just the iPhone and nothing else matters. I recently wrote a Seeking Alpha blog post separating Apple into iPhone and non-iPhone segments. In my mind it shows Apple is currently undervalued.
What’s astonishing is that Google generates less operating cash flow than Apple’s non-iPhone segment, but due to growing faster is valued at a much larger premium than Apple’s non-iPhone segment. This non-iPhone segment includes Macs, iPads, App Store revenue and everything else. I expect this segment to grow quite rapidly over the coming years.
Apple reports earnings next week and my feeling is Apple goes down on the news as a classic buy the rumor sells the news event. If Apple goes down by any significant degree of 10% or more I will be looking to buy. The next two months don’t look kind for the markets. It is for that hesitation I am in cash waiting for a better entry point. This is balanced by the fact October through January is Apple’s strongest time to gain price appreciation.
We’ll know more when Apple’s earnings and Socrates are released.
I welcome any feedback here or on Seeking Alpha.
Live long and prosper.
Vijay @ smilingdad
smilingdad 