Is Android responsible for Apple’s deep market discount?

The purpose of all of this, the best I can tell, is to worm the idea that AAPL is undervalued by 50% into the subconscious of the reader, and not actually about the effect of google's products on apple's stock value.

Quite a fascinating to see it done so well. I'd assume it's quite effective - I found myself feeling like I agreed with some of his premises simply because of how they were presented.

Apple needs to continue this great string of great products. If they do one rev of a subpar product they can see profits drop 50% in one cycle -- and this is in part due to Android. Android is close enough now to eat up share if Apple slips. And WP7, post-Mango, will be there too.

So the discounting is really some healthy skepticism that Apple will be able to keep on this roll. One thing history tells us is that the companies that are great today, will tomorrow be a HBS case study for how their greatness caused them to have a blindspot.

Why is that? Because to Wall Street they are unpredictable. Instead of chasing profits they chase customers. When others are firing employees in a down market they are vacuuming the good ones up. And they don't like to share information. Other OEMs announce products months in advance, Apple you get 1 day to 1 month of a heads up. This creates a lot of disruption for analysts. They hate disruptions. And they have a charismatic leader that a lot of people believe is going to kick the bucket any day now. Disruption.

I'm not sure that's a useful way of looking at it. If Android were never born Apple may have doubled production capacity and still be selling out for lack of a viable competitor.

And even if it's been benign so far, it won't be soon. It's hard to spot the effects of competition in a rapidly growing market like consumer smart phones or tablets. It'll be a lot easier once everyone already has one, and how far away is that? Phones are almost there and tablets probably will be in 2-3 years.

I wish market evangelists would acknowledge this more often. The market is a useful mechanism but it's far from omniscient.

    If Apple bought Google (it already has a third 
    of its value in cash) and it shut down Android, 
    it could create $300 billion in value

Even if it had all the cash needed, isn't the board of directors supposed to agree? Would shareholders themselves agree knowing that (a) Apple is buying Google to dismember it, (b) Apple is putting itself in serious debt without having a guaranteed ROI and (c) Google is still ridding the wave and its best days may have yet to come ?

Why do people feel the need to make such statements anyway?

Apple carries this aura that is amazing, and the stock is way undervalued IMO.

Apple disrespects and makes it difficult for big companies to do business with them in a way they are accustomed to -- yet probably 30% of the "enterprise" salespeople I run into are carrying iPhones and about 20% are ditching laptops for iPads. That's market power nobody on the market has right now.

>If Apple bought Google (it already has a third of its value in cash) and it shut down Android, it could create $300 billion in value. If could even throw away all of Google and still walk out with a profit.

If that happens, Motorola, HTC, Samsung et al. are not going to go 'Oops, we lost' and then shutdown. They are going to move to a new OS, most probably Windows Phone which already has Nokia in the bag, and then the battle lines would be drawn up like in the late 80s and early 90s, Apple with it's single line of devices mantra and Microsoft with the OEMs competing to drive down price.

And not to mention Android is open source, so 'shutting down Android' doesn't make much sense. The OEMs would probably gang up to continue development which Apple can't do anything about.

What if Microsoft buys Mac OS X from Apple for forty billion dollars in cash and then quadruples the cost of Windows? Obviously it can make the money back because of the monopoly!