Apple Share and the iPhone

I have been quite happy with my Apple purchase (AAPL 50 shares at $85.15). I have almost may $500 after only 2 months. I'm a little worried about the new iPhone coming out in June. It may be a blockbuster, but it might also fall flat on it's face.

Let's compare for a second what Apple did when it entered the MP3 player market space with the iPod vs. what it is trying to do by entering the mobile phone market place with the iPhone.

Before the iPod, the whole MP3 market space was a fragmented mess. The players were weak and poorly designed. I remember my Nomad from Creative Labs. The nice gray hue coupled with the poor interface didn't make for much of a player (and it was one of the best). Futhermore, name for me one decent place to download legal music (and Napster doesn't count). Along comes the iPod (and iTunes) with its elegant design and ease of use. Instant hit that made the word iPod synonymous with MP3 music player.

Now with the iPhone, Apple hopes to accomplish the same market dominance. However, there is a big difference...the mobile phone market space isn't fragmented and some can consider quite mature. New phones (and nifty ones at that) are coming out all the time. The iPhone might be a cut above the rest, but that won't last long. Samsung and Motorola are coming out with new models some say are even better than the iPhone. Also, unless Apple has a phone pipeline of new iPhones planned, people will love their offering and then turn to the next latest and greatest phone from a competitor all within a few months. Remember when everyone had to have the Razor? Would you even consider going to a particular carrier for the Razor now?

For that reason, I'm probably going to sell Apple when it has a pop to the $100 mark (currently at $95).

International REITS

Since my last posting I haven't taken any action on CMG. I've certainly been tracking it, but its price has hovered in the low to mid 60's and I'm thinking it it just too expensive. Also, I'm a little afraid to be burned again. Krispy Kreme (KKD) was riding high when I bought it at $47...the ensuing scandal had me sell it at $7.50.

This past Friday Business Week has an article on International REITS. I currently own a few shared of FIREX (Fidelity's International REIT) in my IRA account. I never thought it was the best one available, but I don't have much choice since my company forces us to hold our IRAs at Fidelity.

Business Week Article (registration required)

The article was very interesting. I thought a point they neglected to mention was currency rates and the detrimental risk of a rising dollar. They also didn't mention the high expense ratios...around %1.50 for all the funds except the SPDR DJ Wilshire International REIT (RWX). I think they ETF might be a good diversification fund. It is cheap (%0.60 expense ratio) and it has similar holding to the top REIT funds mentioned.

I have already transfered some funds to my brokerage account and will seriously look into buying some on Monday.