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

Laissez Faire
The Real Reason ISIS Wants You Dead

Chris Campbell

ISIS is a radical terrorist organization wreaking havoc across Northern Iraq. But its members come from all over the world - including many from Western Countries. The question no one's asking is why... Why are foreigners flocking to the Middle East to fight alongside ISIS? And how far does Obama really want to go? Chris Campbell explores...


How to Trade October Volatility

Greg Guenthner

When it comes to the stock market, October gets a bad rap. It's true, there have been some major crashes in October (ahem... Black Monday, Black Tuesday, etc.) but on a shorter timeline this month hasn't been nearly as bad as you might think. Today, Greg Guenthner offers an optimistic look at the month investors love to hate. Read on...


What the Reboot of the US Budget Means for Your Money

Byron King

Big government doesn't come cheap. And right now the U.S. government is one of the biggest in history. So far the budget writers have been able to move money around to keep the machine moving. But as Byron King points out, that will soon become much more difficult. Read on for the full story...


Invest Like a Shark in the “New” Stock Market

Wayne Mulligan

In the late '90s, financial TV personalities like Jim Cramer became mega stars - often drawing more ratings the ESPN. But that was over 15 years ago... That couldn't happen again, could it? Today, Wayne Mulligan details the new flock of personalities that are set to cash-in on a different kind of investment boom. Read on...


The Number One Threat to the US Above Terrorism

Peter Coyne

As conflict with ISIS looms, the Pentagon appears to be in a pickle... They've got all kinds of things on their "wish list", and they're not likely to get all of them. But they may have found a loophole, and that could mean big bucks for a handful of investors who know where to look. Peter Coyne explains...


One Thing to Consider Before You Become a Whistleblower

Chris Campbell

Being a "whistleblower" is no easy task. Regardless of whom you're blowing the whistle on, there's bound to be a fair amount of risk involved... and that's especially true if you're going after the "powers that be." But there's more to it than that... And as Chris Campbell explains, none of it matters if you can't protect yourself. Read on...