Tags: Kass | Apple | peaked | quality

Doug Kass: Apple Has Peaked as Quality Issues Emerge

Wednesday, 24 Oct 2012 10:34 AM

By Dan Weil

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On the same day that Apple introduced its new iPad mini, hedge fund manager Doug Kass said the company already is on a downward slope.

Asked by CNBC if Apple’s best days are over, Kass said, “Yeah, pride goeth before the fall. The biblical injunction about the first and last trading places often has literal truth.”

Apple used to sell a superior product for a higher price, says the president of Seabreeze Partners. But the company now sells an equal product for a higher price, both in phones and tablets.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

Indeed, “it has quality issues that have emerged for the first time,” Kass notes. For example, Apple kept competing map applications off its latest phone, the iPhone5. But Apple’s own map app has malfunctioned badly.

“Apple is showing signs of losing its first mover advantage,” Kass says. “That always happens when a technology company becomes the size Apple is.”

The tech titan now has a market cap of $556 billion, or about 4 percent of U.S. gross domestic product. Rapid growth would be hard to sustain for any company that grew so large.

Analysts have mixed views about the iPad mini, which starts at $329.

“Competitors are probably breathing a sigh of relief with $329,” Chris Jones, an analyst at Canalys, tells Bloomberg. He was referring to the fact that Amazon, Barnes & Noble and Google offer cheaper tablets.

But, “they are still going to sell a ton,” Jones says of Apple.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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