Ray Blanco

Apple released the latest iteration of its popular tablet computer this week. The latest iPad upgrades features already present in existing Apple products. Improvements include a higher-resolution display, 4G wireless capability, an upgraded processor and a pared-down version of Siri — the voice recognition platform first released on the last iPhone.

Apple hit home runs when it first launched the original iPad and iPhone. The successful launches of these products will be tough to beat, however. While Apple doubtless has a road map of future product releases, its visionary founder, Steve Jobs, is no longer at the helm.

Jobs was intimately involved in developing Apple products, and he was a genius at anticipating what customers would want before they even knew they wanted it. Apple is currently releasing products already dreamed up in Jobs’ fertile mind. What will happen when the Jobs pipeline dries up?

There are signs that Apple is slowing down relative to its competitors. Last year, for example, Samsung passed Apple as the top smartphone company by shipments in the world.

In the tablet market, Apple’s market share has also fallen. In 2010, for example, the iPad accounted for over 94% of the tablet market share. By the middle of last year, that had fallen to 70%. Today, that number is down to just under 58%.

Most of that lost share in the overall tablet market has been captured by a diverse group of companies running Google’s Android platform. Like the tortoise to Apple’s hare, I expect the Android army will eventually overtake Apple for the tablet lead.

Microsoft is also champing at the bit to get into this market. Its next version of Windows will run on tablet computers and smartphones. I was able to check out an early version of the new operating system at January’s Consumer Electronics Show, and I found it impressive.

In the meantime, Apple is trading on its past success. Today, it’s the world’s largest company by market capitalization. The $500 billion question is whether or not Apple can continue to grow as it has in the past.

I suspect Apple is approaching the slowdown phase in its growth curve and future growth will be more modest. Even new products, like Apple TV, will contribute only modestly to overall growth at this point.

While I fully expect the mobile computing market to continue to grow, I think there are better ways to invest in it than Apple. Today, Apple is priced for perfection. However, even if Apple stumbles, the mobile market will continue to grow.

One investment theme I’ve mentioned in my investment letter, Technology Profits Confidential, is to buy mobile technology suppliers. This includes major Apple suppliers. TriQuint Semiconductor (NASDAQ:TQNT), for example, is a major Apple supplier. TriQuint manufactures the radio chips needed for a mobile device to connect to wireless networks. Even if an Apple competitor steals market share, TriQuint will have the opportunity to sell to that company instead.

And then there are all the wireless data mobile devices Apple and others generate. A wireless data capacity crunch is happening right now. Wireless carriers like Verizon, AT&T, and Sprint are dumping unlimited data plans in the face of too much traffic to handle. They are now charging additional fees for data above a certain level.

Consumers are hating this, of course. When they shell out hundreds of dollars for a powerful wireless device like the new iPad, they want to be able to use it as much as they like. They want to be able to browse the Web, download applications and watch high-resolution video.

Technology companies that help wireless carriers solve the bandwidth crunch inexpensively will be in high demand in this environment.

Apple shares have zoomed over 500% over the last five years. Today, there are better ways to profit from the mobile revolution.

Regards,

Ray Blanco,
for The Daily Reckoning

Ray Blanco

In 8th grade Ray Blanco was in his basement learning how to build what's called a "Wilson Cloud Chamber," a supercooled device for detecting particles of ionizing radiation. Now, he is an expert in advanced robotics, avionics, genomics, and biotechnology. Blanco was raised in Miami,FL, after his family fled Cuba in the 1960s. He is co-editor of Technology Profits Confidential and contributes to Breakthrough Technology Alert and Tomorrow in Review.

Recent Articles

Housing Bulls Gave Up Here… Big Mistake

Greg Guenthner

Another one of Wall Street’s broken forecasts has plopped a new trade in your lap. If you’re listening to the lunatics on the financial news, you’re hearing that there’s no hope for the markets. Just get rid of your stocks and pound sand. Better safe than sorry—none of these talking heads want to get bullish on anything right now because they’re afraid to look like an idiot if the market keeps dropping. For them, selling stocks now is your only chance to make it to the end of the year without pawning the family cat to buy Christmas presents. Can the market survive? Greg Guenthner explains…


A Quarter-Century’s Conclusion on Our Cancer Woes

Ray Blanco

Breakthrough technologies can hold the most undiscovered money-making potential. What we’ve accomplished in a quarter century with cancer research could make you serious money and save countless lives. Ray Blanco has more on this ground breaking story...


Give Your Book Away For Free, Make More Money

Chris Campbell

The publishing industry is on its head. These days, it makes more sense to make money before you write your book and give it away for free once you do. In today’s Laissez Faire Today, Chris Campbell shows you how to create a hit with those two counterintuitive steps. Read on…


Why Malpractice from the Fed Will Undermine Growth

Steve Forbes

The latest friend of ours to weigh in on the topic of the value of your money is Steve Forbes. As you’ve been reading this week, we paid a visit to Mr. Forbes recently, to discuss his latest book, Money. In this essay, you’ll find his thoughts on currency devaluation… it’s impact of economic growth and your investments…


How to Poke the Russian Bear in 3 Easy Steps

Greg Guenthner

Interested in buying the dip in Russian stocks this morning? Before you do, let’s try to knock some sense into that skull of yours. Late last week, I reminded you why we bid farewell to the big Russian bear back over the summer. At the time, Russia was one of the cheapest markets in the world. But cheap can always get even cheaper—and Russia is certainly no exception. With comic book supervillain Vlad Putin manning the controls from his secret Siberian lair, the Market Vectors Russia ETF (NYSE:RSX) has dropped a cold 20% since registering its late June highs. Does it have a shot at rebounding? Greg Guenthner explains…