I might humbly suggest that those journalists and reporters in both the traditional and financial media are largely missing the grander point on Apple the company and Apple the stock.  Running businesses is a lot more than seeing what ratios look like on financial numbers and saying whether something is undervalued, fairly valued or overvalued.

Fundamentally, and whether it is said this way or not, Apple has a monopoly position in digital music.  It’s easy, it’s fun, it’s cool and nobody I know anywhere has any desire to forklift upgrade their digital music, throw away their investment in purchases and ripping CDs in to iTunes or ever starting over again on another platform.  There may be an exception to every rule, but ever since Apple launched the iPod and “got it right” on MP3 players, nobody has even dreamed of challenging them in this area … not Dell with their media player, not Microsoft with Zune … no one.

As part of iTunes, Apple has made photos, videos, music, movies and now mobile applications simple, easy and bundled under one roof.  The anchor to this roof is most definitely music, and this anchor is something that no other smart phone manufacturer has anywhere.  Google and Android, Palm and Pre and Research in Motion and Blackberry just don’t have this natural anchor and draw to their application stores like Apple … so don’t expect them to be able to make the in-roads that people believe in the smart phone mobile application world.  Unfortunately there is just no other compelling reason to go to their mobile application stores as there is with Apple.  Sorry, but there just isn’t.

Ultimately, a pre-existing and trusted billing relationship exists with Apple’s consumers and the loyalty to the brand now goes way, way, way beyond the religious cult that it used to be.  As a result, Apple isn’t just winning the battle for mobile devices, but it’s also beginning to get people to shift from their Wintel PCs back to the Mac platform in meaningful numbers.  I expect that this trend will not only continue, but that it will also accelerate.  I’m not suggesting that Macs are suddenly going to be back on top in terms of market share, but I am saying that the “halo effect” of Apple’s mobile dominance is paying dividends on their Mac desktop and laptop numbers.  Plus, the next great battle of the larger PC war is going to be when the smart phones fundamentally become the PC of the future.

In parallel, Apple has a massively deep managerial bench of talent and it is my contention that most of the iPhone and iPod product and services designs and offerings were created during the period that Steve Jobs was completely out of the company.  My understanding from some detailed research and discussions with many inside Apple was that Jobs wasn’t even around day to day when the iPhone was created internally as his medical issues were already well underway … just not publicly known.  Steve Jobs might get credit for everything great at Apple, but the reality is a far, far different story and the number of fantastic individuals that are involved and responsible for the success of these mobile platforms at Apple goes way, way beyond any one person.

The fundamental aggregate talent in engineering, management and operational execution is what has driven Apple to greatness … not any one man … and not even Steve Jobs.  Apple didn’t miss a beat when he was out and won’t now that he’s back or if he’s out again.  The rich multiples Apple’s stock gets are a result of this dominance, not a cause of it.  The multiples will also look modest with the penetration of the world’s next large computing platform: the smart phone.  While Apple, Palm, Google and Research in Motion will alll have a market share, Apple owns 75% of all application downloads in the world and has an even larger dominance in music.  These market shares are like GOOG and search, MSFT and Windows, CSCO and routers/switches, EBAY and auctions.  Said another way … nobody can challenge this any time soon.

I will personally admit to having a great respect and admiration for Steve Jobs.  I think that he’s a great visionary and leader and wish him well with his health and most recent recovery.  I believe that he and Larry Ellison of Oracle should get much more credit for what they’ve done in the 2000s than Michael Dell at Dell, John Chambers at Cisco, Bill Gates at Microsoft and others of that decade as they grew their businesses in novel, unique and meaningful new ways after the decade of “a rising tide lifting all boats” was over and the penetration rates of PCs, cell phones and the Internet (broadband connections) rose from virtually nothing to more than 100%.  Said another way, from no market to a mature market … all in a single decade.  That penetration rate is about to be replicated again in the coming decade, but this time with the migration from cell phones to smart phones instead of the migration from circuit switching to packet switching from a decade ago.  Steve Jobs will remain an icon and a brilliant visionary.  However, with or without him Apple is strong, deep and well positioned to dominate as the monopoly that it is … even if most people don’t realize it just yet.  As a result, I like LEAP call options and/or core common stock holdings for Apple as it is clearly already a winner and will continue to be one through 2020 very, very easily.

Check out Phunware when you get a chance (www.phunware.com). 

An enterprise branded mobile application production company.  Primary focus on the iPhone/iTouch platform from Apple, but also covering the Pre (Palm), Android (Google) and Blackberry (Research in Motion).

Facebook page at http://www.facebook.com/pages/Phunware-Inc/84131788172.

Twitter feed at http://twitter.com/phunware or @phunware for you Twitter studs.

Really cool company and phantastically phun phor phanatics everywhere!  Phollow it!

Today we see more evidence of the stresses in “the system”.  It’s not so much that the markets are up or down in a big way.  In fact, today they don’t seem to be doing very much of anything, as the Dow is down a little more than 100 and the Nasdaq is off about 40 as of this writing.

The data continues to be bleak, whether it’s unemployment numbers, manufacturing numbers or pretty much anything else that we want to cite.  However, with that said, everyone continues speculating about our having hit “the bottom” back in October/November when we successfully retested the lows and held.  Even better though is the view that the market has already “priced everything in” except for “new surprises” or macro events.  Yeah, OK, sure it has.

Clearly Mr. Market is expecting the Fed to drop the Fed funds rate by at least 75 basis points to 0.25% at the end of its FOMC meetings today and tomorrow. But, while most of the world is focused on the Fed and “quadruple witching” options expiration this Friday, today I want to focus on the oil and gas patch and the latest announcement from Weatherford International that they too are leaving the United States for the greener pastures of Switzerland. 

Someone in Washington DC needs to start paying attention to how many large US corporations in the energy complex are simply throwing in their operational white towels and literally bailing out of the US in droves (at least in terms of their corporate structure, HQ leadership and investment).  At last count this puts Transocean, Foster Wheeler and Tyco in Switzerland and Haliburton in Dubai, in addition to many, many others that are probably less known by “the masses”. 

This is absolutely great, just great (insert frustrated sarcasm here for effect).  Perhaps as a next step our illustrious leaders can see if they can effectively drive Cisco Systems, Google, Microsoft, Apple and the entire core technology complex out of the country as well (again, insert frustrated sarcasm here for effect).  I’m sure that such grand political efforts would breed the basis for further improvement in the US economy and much stronger future prospects for the continued global leadership of our great nation.  Please, please, WAKE UP!!

Oil Companies Voting With Their Feet—Investor’s Business Daily

Source: 15 December 2008 (c) 2008 Investor’s Business Daily

Energy: Another day, another oil company fleeing the country. No, this isn’t Ecuador, the banana republic that just defaulted on its debt after chasing out investors. It’s the United States, and what we’re seeing is self-defense.

Much political hay has been made in Congress about “unpatriotic” corporations that move operations abroad. Weatherford International is the latest, taking its headquarters from Houston to Switzerland. The oil services company said that it wants to be closer to its markets. But what it really meant was that it no longer saw the future in the U.S.

In a political atmosphere of blaming corporations, it’s no wonder. Halliburton fled to Dubai in 2007. Tyco International, Foster Wheeler and Transocean International all went to Switzerland. As a pattern emerges, America’s global standing diminishes, in part because it’s based on the willingness of companies to invest. It’s an especially bad sign when domestic companies flee.

“The U.S.is an important market,” Weatherford CEO Bernard J. Duroc-Danner told the Houston Chronicle Thursday. But, “it’s just a market. It’s not the primary market.”

How does that sound for a loss of global leadership? If that’s not clear enough, try this: “In the hierarchical pecking order, (Houston’s) not going to be Rome anymore.”

What accounts for this vote of no confidence in the U.S.?

Start with the demonization of oil companies. Executives have been hauled before Congressional star chambers, held up to abuse and ridicule, and then blamed for high oil prices as if they wanted to kill their markets. Rising global demand, nationalizations and Congress’ failure to open the country to drilling go ignored.

Huge companies such as Exxon Mobil, whose market cap exceeds the GDP of most countries, create $100 billion in earnings in quarters when oil prices soar. It looks high, but over the years, the industry’s average returns, at 9%, are less than other industries.

Nevertheless, Exxon’s profits are evidence of its success at extracting oil from miles below the earth’s surface, even underwater, and from unbelievably hostile environments, such as the Arctic. Instead of being objects of national pride for their productivity and efficiency, and subjects of heroic Hollywood movies, their success is considered to be dishonest.

Congressional hostility affects oil companies’ operations abroad, too: Exxon, remember, noted that Congress’ animus toward oil profits directly encouraged Hugo Chavez’s uncompensated expropriations of $1 billion of Exxon’s assets in Venezuela, which drove oil prices higher.

With an expanded Democratic Congress and an incoming Democratic president determined to create “patriot corporations,” it’s no surprise to see companies try to get out while they can. Make no mistake — it’s investment fleeing the country. As this goes, foreign capital could flee next.

Congress’ abuse sets the political tone for the worst to come.

First, oil companies, like all corporations, endure the second-highest taxation in the developed world (39.25% of their income), which dampens their competitiveness. The 2007 OECD average is 27.6% and falling. Worse still, U.S. firms are taxed on operations around the world, unlike the global standard, making a move of headquarters a defensive move.

Meanwhile, politicians openly say they want to hike taxes on oil firms. President-elect Obama seems to have backed off, but questions remain as to whether he can stand up to a rapacious and economically ignorant Congress that hasn’t.

Second, Big Labor is feeling its oats, swaggering confidently with newfound political power. United Steelworkers approved a “national oil bargaining policy” for higher wages and beefed up its “strike defense fund,” both of which point 15 plans to squeeze oil companies, if not launch strikes.

“You have to prepare your membership for 2009,” according to USW International Vice President Gary Beevers on a union Web site. “The oil companies are ready for us; we have to be ready for them.” With Congress at their back, oil companies are unlikely to lose.

None of this portends well for the U.S.business environment. That’s why top-performing firms, such as Weatherford, are exiting. Until Congress learns to appreciate and value oil firms, this will continue, leading to less U.S. investment and influence as more competitive climes beckon.