Warren Buffett's Berkshire Hathaway Takes $1B Position in Apple
As someone who is short AAPL, my perspective is that they simply don&#x27;t have room for growth. At the moment, they are essentially a one product company: the iPhone. And yes, that product is insanely profitable, but those numbers are going down, and personally I don&#x27;t see a way for that trend to change.<p>Apple has expanded into every available market on the planet (literally). The only way for them to grow at this point is to increase their market share relative to android, or increase world economic growth sufficiently that more people in developing countries can buy iPhones.<p>Increasing their market share relative to android in any significant way seems incredibly unlikely to me at this point. As technology stagnates (as is happening with smart phones), the premium products lose cachet and the lower-end products start to achieve parity with their premium competition.<p>The two markets where they could still theoretically hope to achieve more growth&#x2F;penetration are China and India. But China has been antagonistic to them of late, and has demonstrated an interest in protecting its own incumbents who are now making phones that even Westerners will buy (e.g. Huawei). India on the other hand is a highly tech-oriented culture, and as such has a predilection for customization and control that tends to make them prefer android phones. Not to mention that the CEOs of both Microsoft and Google (the only two competitor platforms to the iPhone) are currently Indian, and both companies have demonstrated a specific interest (especially Google) of expanding in the Indian market. And I think that gives them an advantage that&#x27;s hard to overstate.<p>All of this would be fine if the market itself were expanding. But it&#x27;s not. People are upgrading less and less frequently. This looks to me just like the PC market of 5-10 years ago or so. Things have gotten &quot;good enough&quot; for most people. I certainly no longer feel compelled to have the latest and greatest phone right away, and it seems to me that most people feel the same.<p>Lastly, there is the possibility that they will create some new category defining product. This is of course a real possibility, but I feel pretty confident that anything they attempt to do in the car market will fall flat on its face. I could certainly be wrong here, but I just don&#x27;t see how they could possibly offer something so much better than existing cars that i&#x27;d want to pay an Apple-level premium for it. Especially when they&#x27;re competing against someone like Tesla, who has already captured all of the rebellious smart-person cool points in this category.<p>Of course, I could certainly be spectacularly wrong. And to be honest, if I am, I don&#x27;t think i&#x27;d mind losing the money too much. Because it&#x27;d mean that we&#x27;d all probably have some cool new product to play with.