Talking Numbers - CNBC | Yahoo Finance

Sponsored by
Talking Numbers

Trump: Why I sold my Apple

Talking Numbers

Real estate mogul Donald Trump was so fed up with Apple not offering a large-screen iPhone that he sold his shares. However, there may be more to that idea than it first seems.

Donald Trump has an opinion about absolutely everything. And now he's sounding off on Apple.

Like Carl Icahn, Trump has taken to Twitter to criticize Apple for its business decisions. Unlike Carl Icahn, who has invested $4.1 billion into Apple, Trump isn't criticizing the company for, say, not spending buying back more shares or increasing dividends.

Instead, Trump wants Apple to know: Size matters, especially when it comes to smartphones.

The real estate investor tweeted on Tuesday:

Apple's iPhone sales fell way short-they must go to a larger screen, as alternative, fast (as I said long ago)! Samsung's size much better.

— Donald J. Trump (@realDonaldTrump) January 28, 2014

Trump was so adamant about a large-screen iPhone that he sold his stock in protest:

I predicted Apple's stock fall based on their dumb refusal to give the option of a larger iPhone screen like Samsung. I sold my Apple stock

— Donald J. Trump (@realDonaldTrump) January 28, 2014

That may sound rash from someone who has never run a giant tech company. But, here's where Trump may be on to something: Big smartphones are big China. Large-screen Androids (five inches or bigger) make up two-fifths of China's Android-based phone sales. Androids currently make up about 60% of all smartphones sold in China and its market share is growing. In a country where an iPad Air sells for nearly $600, smartphones double as a tablet for many consumers.

(Read: Apple won't make investors happy until it innovates again, say pros)

And, Apple has taken notice, especially now that it has partnered with China Mobile, whose 760 million subscribers make it the world's largest phone carrier. Apple is said to be working on a 4.5-inch iPhone, half an inch larger than the current iPhone 5, as well as a 5-inch iPhone to be released in this summer. In the last four months of 2013, the company sold 51 million iPhones. That was 3.2 million more than the same time in 2012 but nearly 4 million under what Wall Street expected.

But will larger iPhone sizes really make a difference?

According to CNBC contributor Gina Sanchez, founder of Chantico Global, a larger iPhone screen isn't the only thing the company has to think about. She sees the company’s biggest problem coming from the fact that it competes in the highly saturated markets such as laptops, smartphones, and laptops.

"What made Apple such a great investment is that they really introduced new game-changing features," says Sanchez. "They haven't done that in a while. So, would a big screen help? Yes, they're definitely losing market share and I think it could help stem that loss. But, they need something bigger to really make it a screaming buy."

(Read: Now at 160 Days, Microsoft CEO Search Could Be Nearing Its End With Insiders on Inside Track)

For Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, Apple is indeed a buy, at least from the technicals perspective.

According to Ross' charts, Apple held a uptrend line since July 2013, when it dipped below $400 per share. That trend line was finally broken on Tuesday after Apple's disappointing quarterly earnings.

However, Ross sees a bright spot:  the stock dropped roughly 12% from its December highs. A fall of that proportion would normally be a bad sign but for Ross, it's good because 12% was roughly the same amount the stock fell back in September, after which it climbed more than $100. What's more, Apple is more or less holding its 150-day moving average of $500 per share, a key support level.

"That technical symmetry could bode well for shares," says Ross. "I'd be a buyer. I'd take a chance here as long as we can hang in above that key $500 mark, I think Apple could be a real nice buy on weakness.

To see the rest of the discussion on Apple with Sanchez on the fundamentals and Ross on the technicals, watch the video above.

More from Talking Numbers:

Forget earnings, this chart shows why Facebook's a keeper
Wells Fargo: Get ready for a drop in stocks for months to come
What a $10.10/hour minimum wage means for Starbucks

________________

Follow us on Twitter: @CNBCNumbers
Like us on Facebook: facebook.com/CNBCNumbers

 

Rates

View Comments (163)