Apple shares reached another all-time high at over USD 148 per share. With a market capitalization of over USD 775bn, Apple could become the first company to reach a trillion dollars in value, a mile-stone that evaded companies such as Cisco or Microsoft at the heights of the dot-com bubble. Apple is a well-managed company and its products are widely viewed as of great quality. So what could go wrong? The main concern with Apple is that is not selling luxury good, but consumer electronics for which features get quickly copied by rivals and for which cost prices continue to drop fast.

Laptop computers used to sell for over CHF 2’000. Today you can buy them below CHF 300. Apple’s margins of 70% on phones are not sustainable. Regardless of what growth they can achieve in their other products, the margins on their phones will probably decline in the future. If margins of iPhones were to converge with industry levels, profits would plunge and so Apple shares. Trees don’t grow forever, and apples drop on the ground.

This is not a recommendation but just our opinion. Please consult with your financial advisor before investing!