Does The Drop Really Make Apple A Buy?

Parchayi and me long Apple (AAPL) but am not adding to my Apple position on this dip and here is why.

Simply, Apple’s growth has slowed down to nothing. I recently compared Apple’s growth to that of Google (GOOG) and Microsoft (MSFT), and both those companies seem to be growing faster than Apple.

A picture is better than a thousand words. Here is what Apple’s growth looks like:

There is a distinct downward trend to Apple’s growth that started in 2011. This also coincides with the year that Apple replaced major improvements in it’s devices and moved on to incremental updates. Here is a quote from the Engadget review of the iPhone 4S that sums up the iPhone and subsequent generations perfectly:

“iPhone 4S does everything better than the iPhone 4, but it simply doesn’t do anything substantially different.”

Can Apple reverse this trend? For Q1 2014, Apple guided essentially zero growth from Q1 2013.

Is this the beginning of an upward trend? Or is this just a short term part of a longer downward trend? The picture is not clear yet. I would wait for next quarters results before investing in Apple. I’m not selling yet either, though. For just one reason. I finally think this might be the year that Apple steps up to the plate and makes an iPhone that can compete with its larger screened NFC toting Android brethren.

Disclosure: Long AAPL, GOOG

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