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Paul Mampilly is an American investor and former hedge fund manager. Paul has been featured on CNBC, Fox Business News and Bloomberg TV. He is the founder of the popular investment newsletter Profits Unlimited, where he uses his skills, experience and knowledge as a former Wall Street ...more

Apple’s New IPhone 8 Looks Like A Dud

Date: Monday, September 25, 2017 10:56 AM EDT

In 2003, I bought my very first Apple product: an Apple iPod.

I loved it because it made listening to music easy.

With two clicks, I could find the exact song I wanted to hear. It was perfect for trips or for running, because I could make playlists of my songs and fit my whole music collection on just one device.

Looking back, it was the first time I’d owned something that I loved to use.

So it comes as no surprise that I bought an iMac computer, and then upgraded my iPod and my iMac when new models came out.

After that came the iPhone, and then a series of iPads and iMac computers.

When I wanted any computer product, I bought an Apple.

Over the past 14 years, I estimate that I’ve spent about $35,000 on Apple products. And I never bought another company’s computer product during that time.

Until now.

As of this year, I’m no longer buying Apple products.

That’s because I have a knack for spotting new product trends that are going to explode higher before anyone else, just like the iPod.

Equally, I have a knack for getting off trends before a big decline. And I believe Apple is about to go into a period of heavy decline. Here’s why…

A Feel-Good Experience

You see, Apple’s lost the thing that got me to buy my iPod 14 years ago.

It’s the delight of having something that works so well, you love using it.

It’s the feeling of wishing that everything you owned worked in the same way.

It’s this feeling that made me go buy more Apple products…

Because they gave you an experience that no other company’s did. That experience made you feel good, so you wanted more and more of it.

However, since Steve Jobs’ tragic death in 2011, Apple’s lost the ability to deliver this experience.

My most recent Apple computer is such a disappointment that I’ve committed to buying a Google Chromebook.

Apple’s iPads are so poorly rated compared to Microsoft’s Surface or Google’s Pixel C that I refuse to buy another one.

And I’ve already jumped ship on Apple’s flagship product, the iPhone, because I believe Apple is simply tinkering instead of innovating. By tinkering, I mean that it’s changing colors, sizes and features that don’t matter to me.

However, in the one thing that matters to me the most — giving me a great experience when using its products — Apple has fallen horribly behind.

This is why after a year of hoping for better things from Apple, I just recently switched to a Google Pixel XL. This is a phone designed by Google and powered by its Android software.

My experience with Google’s Pixel XL has been fantastic. The operating system is noticeably faster. The voice recognition allows me to dictate my text messages with incredible precision.

Using Google’s voice assistant by saying “OK Google” to do searches and find things is fun and enjoyable. Most noticeably, my kids’ delight in using Google’s products and services.

Apple Is Failing

Now, it’s possible that I’m an outlier. However, important voices are saying the same thing that I am when it comes to Apple’s shortcomings.

The iPhone 8 is “not the upgrade you’re looking for,” says Geoffrey Fowler of the Wall Street Journal in his review of the just-announced iPhones.

The Verge’s Nilay Patel writes that the iPhone 8 shows that Apple’s design has “basically stood still for four years.”

“I got a little, er, bored reviewing this device,” says Nicole Nguyen at BuzzFeed News. “There’s a lot that’s still the same as last year’s 7.”

I believe this represents a problem for Apple stock. That’s because investors like Warren Buffett have come and bid Apple stock up in anticipation of the new iPhones being a huge success.

And while Apple stock is up 36% this year, that’s based completely on the hopes that Apple’s new iPhones will sell in a big way.

In other words, if they don’t, you’re going to see these gains and more go away. And more people will start choosing Google’s Pixel phone, or Samsung’s or LG’s phones, because they are giving people a great experience.

Now, many people will dismiss my arguments because of the performance of Apple stock recently.

However, my 20-plus years of investing have taught me that the performance of a stock always follows what’s going on in its business.

For me, Apple’s business is innovation, and specifically innovation that gives you an incredible experience while using its products. But in this most important thing, Apple is failing.

Because of that, it’s just a matter of time before Apple stock follows and begins to fall precipitously … destroying the gains that it’s generated over the last decade.

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