Today Apple's stock did very well because of a mix of upgrades and the recent news of the split that will be accounted for on February 18th and be reflected on Feb. 28th as 2 for 1 split. Thinking more about Apple and it's future prospects it is interesting to note that current analyst estimates peg Apple as owning more than 80% of the handheld music device market. At first glance one would think that another player or players will emerge and steal away that market share but i believe that will be a hard fought battle. Apple's combination of ease of use of their player, "cool" factor, solid but not spectacular features built-in to the iPod and, and most importantly their DRM (Digital Rights Management) will have an audience that is captive to the Apple way of doing things.
DRM is the crown jewel in this music strategy. As more people buy iPods and use the Apple store, more people will be locked in to sticking with Apple just to maintain interoperability. I believe Apple's marketing campaign with Pepsi to give away free songs should be expanded so even more people start using the Apple store. Once people are exposed to how easy it is to browse for and buy music they will expand their music collections. As they expand their music collections with mp4's downloaded from Apple's iTunes store they will be further entrenched in the Apple camp whether they realize it or not. Apple may not be able to hold on to 80% of the market share, but i believe it will be a hard fought battle for every challenger to steal each percentage point away.
In other news:
Today was an interesting day on the market, i finally got over the fact that i got nailed by the Stem cell stocks and got back in the market. ISWI's earnings came out and they were not impressive or negative, but the stock price was hurt anyway and we saw a drop in the price from a previous close of $6.52 to a gap down open of $6 and even a day low of $5.40. The stock then rolled in waves from $5.80 to upwards of $6.20 and back down again. I jumped in at $5.80 and intend to hold until i hit $7.00
Stocks to watch:
INSP (consider buying in around $43)
NAT (moving up $5 in the last week to $53)
PDS (up 10% in the last week to $75.45)