Kindles, Kindles Everywhere! Everywhere I Go I See A Kindle!
Amazon is a fantastic company with an very average product. Contrast this with Apple with arguably the most important product of this decade: the iPhone. Currently, I am very long Apple (and looking to accumulate many more shares at current levels) and very short on Amazon. I shorted the stock yesterday before earnings, and thus far, it looks like it is going to pay off nicely. With that said, let’s get back to the Kindle that I see everywhere I go.
Ok really, hopefully you know that I was kidding with this title. I don’t see a Kindle everywhere. In fact, I don’t see a Kindle anywhere. Have you ever seen someone using one? I mean really, who wants to carry around this bulky device? I’ll be shocked if this product isn’t discontinued by this time of 2009.
Contrast this with Apple’s beautiful iPhone. I see iPhones everywhere (I’m serious this time). I am a huge Apple fan and love their products and have yet to buy an iPhone. Until today. Today, I’m switching myself and my entire family onto AT&T and my Dad and I are both buying an iPhone. How many people out there are like myself, huge Apple fans but were waiting to either let an old cell phone plan run out or like in my case, drop their Blackberry into water accidentally, to buy an iPhone?
Estimates out there reveal that Apple has sold around 10 million iPhones this year so far. They sold 6.9 million in the last quarter. I imagine they will sell at least 5 million in the current, Holiday quarter, which would result in about 15 million iPhones sold for 2008. This would be an extraordinary success.
While at the AT&T store, I saw a woman replace her iPhone for the full unsubsidized $500 because she broke her old one. Pretty hefty purchase in this economy.
The bottom line is that the iPhone is truly a game changer and the Kindle is anything but. With Amazon needing further multiple contraction in my opinion, I am short the stock.
When it comes to Apple, I don’t think there is a better investment out there with a 3-5 year time horizon. They will eat up market share during the recession and come out on the other side shining like never before. I’m buying Apple and buying as much as I can.