Technology companies are always prone to obsolescence, whether that be in technology itself, or purely in consumer taste, competition is always around the corner.

AAPL has been remarkable over the last few years in that they have bucked the competition on both counts. However, Android seems to be cutting into their market share. This evidence is present in their financial statements that discloses a significant Inventory and Receivables bulge comparative to Revenues.

Revenues………………+52%
Inventory………………+130%
Receivables…………..+96%

This of course may well be due simply to the ongoing recession. This bulge has been reduced when you look at the Quarterly figures, however, I suspect that AAPL earnings might well disappoint for the first time in years. AAPL is almost a given to provide an estimate, and then significantly beat those estimates.

What if their estimate is accurate, or even slightly lower? That would be a surprise. Stocks don’t like surprises of the lower kind. Even the chart is suggestive of a pause in the uptrend. This looks to be a potential area to either sell-out if you are a long term holder, or get short if you are a speculator.

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