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The iPhone Winner and Loser

July 8, 2008

By Georges Yared, Editor, GameChangers

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a penny (reported EPS of 0$.84 vs. expected $0.85), but a dear friend of mine and a legendary portfolio manager, Michael Mullaney, once told me after another high-growth company missed by a penny, "Georges, if this management team can't find a lousy penny, I don't want to be involved with them."

He's right. RIMM does have an impressive lead in the enterprise smart phone sector with its Blackberry, but RIMM wants to also penetrate the consumer market. This is where Apple will kill them. Apple's iPhone will have consumer applications that RIMM simply cannot match.

The bottom line: Apple will make far more significant inroads into the enterprise sector than RIMM will in the consumer sector (see, "How to Invest in the Smart Phone Leader.")

So get ready. You can bet the iPhone will receive big-time coverage in the media as it's released July 11. This is a global release, with Apple launching the phone simultaneously in 22 countries with another 48 nations coming on board by the end of the year.

Mark my word, analysts' are going to revise their sales estimates upward because the overwhelming sales of the iPhone will build revenue visibility well into 2009 and 2010. Apple is smart about the way it treats these revenues. Remember, Apple brings in a total of $399 per phone (AT&T pays $200, the consumer $199), but it recognizes that revenue over the 24-month subscriber commitment ($16.63 per month), which Wall Street loves because it can count on these revenues.

Meanwhile, RIMM has sold off more than 20% since its earnings release. It may seem like a buying opportunity, but I recommend that you stay away. Think of that sweater you own and a small piece of the fine knitting comes loose. It's only a matter of time before the whole thing unravels. That's RIMM right now.

But Apple? It will double by the end of next year as its many legs of growth are virtually non-stoppable. I recommend you follow my buy instructions now.

Now, if you'll excuse me, I have to show my son how to run the lawn mower. Time is limited!

Georges Yared has spent the last 30 years spotting GameChangers like BroadVision (over 7,000% profit), Cisco (4,350% profit), VeriSign (3,800% profit) and many more. Now he wants to help you. Join GameChangers today and get immediate access to his very latest advice.