In an interview with CNBC regarding his company’s weighting cut back on Apple Inc. (NASDAQ:AAPL), Channing Smith, Managing Director and Portfolio Manager of Capital Advisers Growth Fund feared Apple Inc. (NASDAQ:AAPL) might not be able to consolidate its success due to so much that Apple Inc.’s (NASDAQ:AAPL) growth patterns borrow from the sale of its iPhone.
“Really, we have cut that back and the main reason is where we are in the technology cycle. If you look at the numbers from comScore – we have about 75% penetration rate for smart-phones. If you look at IDC – we are going about 9.8% probably for the next couple of years. We think we are at that mass adoption stage where it’s going to be tougher for Apple to grow with such a large install base. We think a lot of the purchase will be more dependent on replacements and we think, with the pricing and just where we are in the industry, it becomes a lot more difficult going forward,” Smith said.
The Managing Director of Morning Star’s four-star rated mutual fund that has carried Apple Inc. (NASDAQ:AAPL) as its top holding hinted Apple Inc. (NASDAQ:AAPL) may suffer from poor growth in days to come. With Apple Pay gaining ground and iWatch’s launch Smith’s company might miss on some lucrative percentage points to the upside in shares on Apple Inc. (NASDAQ:AAPL) in the near future. However, Smith disagreed mentioning Apple Inc. (NASDAQ:AAPL) may not repeat its astonishing success in the arena.
“Yes we think Apple Pay is going to be enormous – we don’t know how big of a profit driver it’s going to be. Keep in mind that iPhone is the big profit driver so that slow has to be made up somewhere else. If you look at the iWatch we don’t think it’s going to be a category killer. A lot of analysts out there are projecting that you’re going to see 50 to 60 million units ship next year but we’d like to see the proof in the pudding first. If you have a phone in the pocket and an iWatch – we don’t really see the benefit of having an iWatch so we think that those numbers might be a little lofty,” Smith said.
Many of us see Apple Inc. (NASDAQ:AAPL) as equipped with technological skills and a lot of us believe that Apple Inc. (NASDAQ:AAPL) operates its business with a certain degree of boldness, yet, according to Smith and his Capital Advisers Growth Fund a slow in the technological innovation is inevitable and they say it would definitely have an impact on product prices. Smith finds it apparent that even with sound vital signs Apple Inc. (NASDAQ:AAPL) may not be able to achieve its projected growth margins.
With the announcement by Samsung Electronics Co Ltd (SSNHY) to bring out their Samsung Pay supported new Galaxy S6 smartphone the competition will sure become rock-climbing tough and it would be interesting to see how Apple Inc. (NASDAQ:AAPL) pushes its foot in the rock to lever itself for the next hand grip.
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