Dear Mr. Berko: I recall a column of yours from a couple of years ago that was negative on Apple because Steve Jobs died. Apple has gone up a lot since that column, so I wonder whether it has gone up too much to buy for a three- to five-year investment. Also, what is your opinion of Apple Watch, which wasn’t on display at the recent Consumer Electronics Show in Las Vegas? I’d like to buy Apple because several of my friends and I believe that Apple Watch could be as popular for consumers as the iPhone and iPad.
— F.S., North Miami, Fla.
Dear F.S.: When a company has a good product, it advertises it. When the product is basically ordinary, the company markets it.
I don’t like the Apple Watch and doubt it will be a success. It’s an ugly, clunky, unattractive, superfluous gadget that will be a silly waste of money. Unfortunately, I’ve learned the hard way that among the reasons Apple has been so successful is its impressive ability to create huge, profitable mass markets where none existed before. Apple skipped the annual Las Vegas soiree in January, but several rivals, including Sony, were showing off their smart watches. However, Apple did the unusual and previewed its smart watch last September. The Apple Watch will come in two different sizes, and there will be three different “editions,” plus an array of straps and add-ons that will price the thing between $450 and $700. It’s Apple’s first new product category in more than five years and the first under CEO Tim Cook. So far, this newfangled product has failed to excite consumer interests. However, Apple-watchers are predicting smart watch sales this year to be between 10 million and 40 million units. To ensure consumer attention, Apple will come out with Apple Watch 11 in 2017, and, in 2019, there will be Apple Watch 1V, which will be water-resistant to 900 yards. Albert Einstein once remarked: “I fear the day technology will surpass our human interaction. The world will have a generation of idiots.”
In December 2011, two months after Jobs passed away, when Apple was trading around $440, I told readers that without Steve, Apple would be dead in the water. Some big names on Wall Street also believed that Apple, without the iconic Steve Jobs, would get worms and lose its shine. When a reader asked whether it was a good stock to buy, I said, “No!” Apple without Steve was like the Miami Dolphins without Don Shula or the Tampa Bay Buccaneers with Lovie Smith. However, nine months later, Apple was trading at $705. I missed the top by only 265 points. Scores of readers chastised me for such lousy advice, and every once in a while, my elder grandson (who didn’t sell his shares) revels in giving me a gentle jab. During the following 20 months, Apple retreated from its lofty $700 perch, falling to $385 in April 2013 before rising back to the mid-$600s by May 2014. Then, in July, the board of directors declared a 7-for-1 split, and Apple (AAPL) shares now trade at $127.