Apple Is Doomed

I believe you’ll start to see that this once-great American company has peaked and that the Apple stock price is ready to decline.

Editor’s Note: Welcome to our week-long special series! Our editors for both the Sovereign Investor Daily and Winning Investor Daily are looking ahead to 2018 and providing their insights into what they believe will be the big movers and shakers for the new year. They are also looking at critical steps you can take to preserve and grow your wealth. Happy reading! — Jocelynn Smith, Senior Managing Editor

Apple is doomed. And 2018 is the year where I believe you’ll start to see that this once-great American company has peaked and the Apple stock price is ready to decline.

Truthfully, I’ve been wrong on Apple Inc. (Nasdaq: AAPL) stock for a year now.

Driven by Warren Buffett’s huge buying spree — over $20 billion in shares — the Apple stock price has gone up, up and up.

This has happened despite its business being stagnant or in slight decline, depending on which quarter you look at.

To me, most people buying Apple stock are buying into a memory.


That memory is of Steve Jobs introducing truly revolutionary products.

Like the iPod in October 2001, which by allowing you to carry tens of thousands of songs in your pocket transformed the way you listen to music.

Like the iPhone in June 2007, which shrunk a computer so that you could have access to everything you used to use your desktop computer for.

Like the iPad in April 2010, which perfected the tablet computer as an alternative to laptops.

But then Jobs died in October 2011. Since then, Apple has introduced no new revolutionary products.

Instead, Apple now tinkers with models, sizes and colors. Apple sells five different models of its iPhone. You can get them in six colors and in multiple sizes.

Apple’s latest phone, the iPhone X, has facial recognition and an OLED display.

Some people think this is a big deal. Steve Wozniak, one of the co-founders of Apple, thinks it’s no big deal at all.

“I’d rather wait and watch that one. I’m happy with my iPhone 8, which is the same as the iPhone 7, which is the same as the iPhone 6, to me,” says Wozniak.

Now there’s an even bigger thing happening. One that guarantees that Apple’s future is one that’s going to disappoint the people who have been buying its stock.

An Incredible Red Flag for the Apple Stock Price

That thing is the Chromebook. A Chromebook is a cloud-based computer that uses Google’s software.

Chromebook sales are on fire in a market that Apple used to dominate: schools.

Chromebooks now have an astonishing 58% market share in K-12 schools.

Even my kids use Chromebooks. Their school uses Google’s cloud-based word processing, spreadsheet and presentation apps.

People looking at the Apple stock price through the eyes of iPhone sales are going to miss this incredible red flag.

You see, Apple’s brand, reputation and customer loyalty begin with kids using its products.

I believe that Apple’s seeding schools with computers set the platform for Apple’s success. By the 2000s, those kids had jobs and money, and had formed a connection to Apple because their first exposure was through the company’s computers.

Steve Jobs confirmed this in a 1995 interview:

One of the things that built Apple IIs was schools buying Apple IIs. … We realized that a whole generation of kids was going to go through the school before they even got their first computer, so we thought the kids can’t wait.

Now Google is forming that relationship with kids. Already my kids and their classmates are learning to use Google by using voice commands instead of typing.

Amazon is forming that relationship with kids as well through the use of its Echo devices and Alexa platform.

The Innovation Race

Using voice instead of a keyboard is a revolutionary shift in how we use computers. This is a revolution you can see unfolding slowly right now through the sales of speakers that connect to cloud platforms like Google Assistant and Amazon’s Alexa.

Apple had the lead in this market when it introduced Siri in October 2011. However, since then, it stopped innovating and improving Siri. It let Amazon and now Google overtake it.

And I believe that because Apple’s focusing on tinkering rather than innovation, Amazon and Google’s lead are only going to increase while the price of Apple stock declines.

Apple wiped out the old cellphone leaders — Nokia, BlackBerry and others — because those companies sat on their lead and tinkered instead of innovating. I believe the same thing is going to happen to Apple.

Now, the Apple stock price continues to go up because investors like Warren Buffett are willing to bid it up. Plus, the company is buying back billions of dollars in stock each quarter.

However, this doesn’t change the fact that Apple is now losing “mind share” among the customers of the future — kids — and losing the innovation race by falling behind in the next wave of computing, which is going to be in voice-based cloud platforms. Watch in 2018 for the decline in the Apple stock price.


Paul Mampilly

Editor, Profits Unlimited

  • Diana Musto

    Tinkering?!!! Have you even ever looked at Apple’s chip technology?! Talking about what you consider minor iPhone upgrades to downplay Apple’s innovation and totally ignoring the A11 Bionic chip with 64 bit architecture is a pretty big omission.

  • Pete Rehrmann

    What affect will Apple Inc.’s decline have on STMicroelectronics (NYSE: STM)?

  • Jerry Ransom

    Big whoop…. I hope apple can build a market on a few nerds who care more what’s under the hood than factual utility… this may mean apple can hang on a little longer (works for Detroit … we pay $40k for an $18k utility vehicle because of perception over reality)

  • jrj90620

    Great article.I have used my IMAC for several years.My next computer will be a a Chomebox or Chromebook.I guess,the only major change going on at Apple is there move into autos.They will have to come up with something special,since lot of competition there.

  • Chick

    That under the hood tech is setting up the hardware for a tech revolution. ARkit, neural network processor in the A11 chip etc. Chromebooks have little utility unless you cloud access – maybe “HaloFi”will make that a reality but it is not here yet. Me, I want my apps and data local with encrypted backup to the cloud and elsewhere. Also Apple’s facial recognition is based on true 3D imaging not the 2D imaging that others deployed. They are now copying Apple’s 3D tech. I’m staying with Apple.

  • mannasage

    Only $15k, I’m a month from being 86, would you pay me $15K if you were 86 Paul??? You need to think of your very SR. (& most savvy) investors for a change. The Stansberry folks can tell you of their regrets in not dealing with their Sr. customers, just ask them!

  • Michael Alt

    Keith Fitzgerald(Hi velocity Profits) says Apple is entering the Medical device and testing market and could/should be revolutionary for the company. They will not be just a computer/iPhone company if this is successful. He strongly recommends the stock. We shall see. I am keeping apple in my portfolio until this plays out next year or longer.

  • Marga Doerr

    Well, I am not an Apple person and never will be. Having said that I almost bought – and should have – years ago Apple stock when it was around $90+ and I didn’t. C’est la vie! I find people being enamored with their I-Phones and having to have the latest ones amusing, but I guess good for Apple. When I decided on my first smartphone, I asked my tech people and they all recommended to buy an Android one because it was a better operating system and now that Google has their own Pixel 2 which has been rated higher than the I-Phone X – which has the Android without any overlays, they should do well with it. I know a lot of people don’t like cloud computing – we all have our idiosyncrasies – I have no banking information on my smartphone – but from a practical standpoint, especially if you travel a lot, it makes a lot of practical sense. And Paul has a point, Apple ensnared the kids with their I-Pad and now Google is doing the same with their product.

  • djensen1x

    Out of the fang stocks I would say the riskiest would be apple or Netflix. If you look at the history of the computer stocks like Motorola, apple etc. you saw intense competition and the stock prices rose and fell relative to their innovation and profits.

    That Apple took an amazing turn is noteworthy but if they don’t continue innovation then growth will begin to stagnate and that is what we investors all want, growth.

    I would say just be prudent in your investments and really be diversified; not weighted heavily in one stock. Apple isn’t going anywhere and as along as I see people clamourning to their incredible retail outlets I would say it’s a reasonable stock to have in your portfolio.

  • Duane Harris

    I just joined your community and was impressed with your analytics Paul, until I read your “tinkering” comment. Its interesting to me how many times analysts and investors have declared Apple on the decline, or doomed only to be surprised by its innovation.

    The A11 bionic chip is far more than “tinkering.” It is about focusing on providing a neural network ON your device, when the cloud is not available or slow to access. Your mobil-based machine learning app is useless if it can’t get fast feedback. It is a radical departure from what everyone else is doing in the cloud.

    This on device neural network allows Apple’s, and every other iPhone developer’s, AI apps to continue learning, even when the cloud is not available. For example, the iPhone X continues to learn as the user’s face changes over time, regardless of the accessibility of the cell network, thanks to the onboard neural network offered by the A11 bionic chip.

  • joslin

    In the first Quarter of 2017 Apple reported revenues of 54 million U.S. dollars from iPhone sales alone. Net income for the year was $48.35 billion. “US technology giant Apple on Tuesday became the first company ever in the world to enjoy a market capitalisation of $800 billion. If it were a country and iPhone its capital, it would have been 17th largest economy in size after Indonesia [May 2017].” I don’t mind holding the stock of a successful company with a value of this magnitude in my portfolio.

  • Kid 123

    Paul — You are proving yourself to either be hopelessly uninformed — or deliberately manipulative.

    What you wrote above? It is profoundly wrong and you are ignoring the actual trends. Let me sum it up for you:

    1$ invested in APPL today will be worth 2$ in less than 5 years. Why? Magic. Apple magic.

    Apple continually innovates. Expect to see a rapidly expanding profit stream “around” these two devices: Apple Watch & HomePod. The watch && health frameworks, the HomePod and IoT.

    Apple will continue to sell the most expensive, yet desired phones for the foreseeable future. Why: We prefer to buy something that works better for us than junk. Junk will sell, but not to people who buy Apple products.

    I’m not an Apple fanatic: But I am far better informed than you are. Did I mention repatriation and Apple’s stated plans?

  • Kid 123

    You have no idea what is under the hood, yet you profess to.

    People will certainly buy cheap stuff and people have been programmed to use free stuff (email?) but that isn’t everyone (begs the question, how do they make money off of free? Advertising).

    How is it that Apple can sell fewer phones than Samsung, yet make multiples of profit off of each one …and have it’s buyers wait in lines to get the next model?

    What is under the hood today, is the raw material for the apps of tomorrow. And by tomorrow, I literally mean each and every day going forward. AR and ML alone are shaping up to be a giant wave of apps on iPhone alone. How about that Watch, eh? Another wave of apps. All these waves of apps! Profit!

  • Kid 123

    Completely spot on.

  • Kid 123

    This isn’t an article! It’s an ad for an investment service.

  • Kid 123

    Yes. And you can load those neural networks (and other AI) into an iOS app faster and easier than one would believe. Amazing stuff actually. So-called article is sadly uninformed or deliberately manipulative.

  • Kid 123

    Goole sold how many of those Pixels? A tiny insignificant amount. What is their PL on them? We know Apple is absolutely KILLING profit on all models of iPhone. But no, you want to believe that it’s going to fail because you have such a wonderful imagination!

  • Kid 123

    They have not been a “computer” company for awhile, yet they make the best personal computing platform today.

    It is very hard to classify what Apple will be in another 5 years, but the safest bet is: More successful than Apple have been to date.

  • Kid 123

    Is that a company that Paul pushed in a previous so-called article?

  • Mike McMillan

    Gee whiz Paul, do you consider this comprehensive analysis? Just a few quick notes: 1- Profit margin. Their sales could go down 15% and they would still be the most profitable company in the world. What is the margin on a Chromebook. 2- Overseas. Google has big problems in China and the European Union. And most adults don’t trust google. These kids will eventually grow up. 3- The cool IT factor. Beautiful devices, beautiful FREE software. Ever used gmail? All of google’s software looks plain, boring, simple. 4- No new products? The Apple Watch is the number one selling watch in the world, period. The new home pod speaker will start to catch on once the public understands that it is so much better than everything else out there. I will let you in on a little secret for free – it’s going to put sound bar makers out of business, and it will eventually absorb all the functionality of Apple TV. My iMac is my 4K television and the home pod will be my sound system. Apple is going to conquer what Microsoft cannot, the family living room. 5- I have found myself gaming more and more on my Apple TV. The Microsoft/Sony/Nintendo gaming consoles are slowly losing market share to Apple. Fewer and fewer are willing to pay 60 and 70 dollars for a single game. Apple is sneaking in the back door with this one. Does google have a gaming chromebook?

    Oh, and remember this – almost 60 percent of those kids using chromebooks have iPhones in their pockets. No contest.