For several months I have been writing that the market for smart phones in the developed markets is near saturation and Apple AAPL does not have the right products for major growth in emerging markets. In emerging markets, Google GOOG Android has been growing my leaps and bounds.
This morning there is research showing that Apple’s market share is falling rapidly. In a note, AllianceBernstein predicts that Apple’s market share in smart phones will fall to about 12% this quarter, compared to 23% in the same quarter of 2012. Further, the firm predicts that Apple’s market share may fall into single digits next quarter.
On the surface, this seems like ominous news, but for those whose objective is to make money by trading and investing in Apple, this is good news. Here is why.
Until not long ago, Wall Street was busy feeding Apple stock to the masses. The note from Bernstein shows that Wall Street, which was previously behind the curve, is now catching up with reality. In my analysis, the reality is now mostly discounted in Apple’s stock price. My extensive backtesting going back 30 years and my recommendations going back about six years show that when a high momentum stock breaks down and Wall Street accepts the reality at a time when the balance sheet is still strong, the next swoosh down is typically the low of the cycle.
There is no guarantee that a downward swoosh will occur. However, the head and shoulders pattern traced out by Apple when it was trading near $700 set a target of $340…Read more at Forbes
