{"id":33271,"date":"2012-11-01T23:30:16","date_gmt":"2012-11-02T03:30:16","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/11\/microsoft-the-better-long-term-bet-but-apple-and-big-tech-a-short-term-buy\/"},"modified":"2012-11-01T23:30:16","modified_gmt":"2012-11-02T03:30:16","slug":"microsoft-the-better-long-term-bet-but-apple-and-big-tech-a-short-term-buy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/11\/01\/microsoft-the-better-long-term-bet-but-apple-and-big-tech-a-short-term-buy\/","title":{"rendered":"Microsoft the Better Long-Term Bet, But Apple and Big Tech a Short-Term Buy"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

Last week<\/a>, I suggested that Microsoft ($<\/span>MSFT<\/a>)<\/strong> would be the ultimate winner in the long war for dominance of the smartphone and tablet markets.<\/p>\n

Though Apple ($<\/span>AAPL<\/a>)<\/strong> dominates today, it has no real defensible \u201cmoats\u201d that would prevent an aggressive competitor from muscling in on its turf.\u00a0 Consumers are notoriously fickle, and there is little to lock them into the Apple ecosystem.\u00a0 You can access your key services\u2014such as Facebook ($<\/span>FB<\/a>),<\/strong> Twitter, Skype and even Apple\u2019s iTunes\u2014from just about any device, after all.\u00a0 And if Microsoft is able to leverage its dominance of the desktop market by familiarizing users with its Windows 8 operating system\u2014which looks and feels more or less the same on desktops, tablets and smartphones\u2014Microsoft may well dig the elusive moat that Apple has thus far been unable to dig.<\/p>\n

Moreover, Apple\u2019s \u201cidea man,\u201d the late Steve Jobs, is not something that can be replicated, and going forward Apple will find it increasingly harder to stay ahead of its competition.<\/p>\n

As Apple discovered to its dismay during the PC era of the 1980s through the mid-2000s, computers are ultimately commodity products for which it is difficult to charge a premium (and yes, I lump smartphones, tablets and PCs together as \u201ccomputers\u201d).\u00a0 The iPhone\u2019s popularity has been bankrolled by generous subsidies by service providers like AT&T ($<\/span>T<\/a>),<\/strong> Verizon ($<\/span>VZ<\/a><\/strong>) and Sprint ($<\/span>S<\/a>)<\/strong>. \u00a0But as these carriers start to push back against subsidies, Apple will find it harder to maintain its margins without lowering its prices\u2014something the company will be reluctant to do.\u00a0 In a very short period of time, Apple may again see itself fall from the position of industry leader to that of a niche provider.<\/p>\n

None of this suggests Apple\u2019s imminent demise, of course.\u00a0 I\u2019m talking about a long war of attrition.<\/p>\n

But none of this matters in the short term.\u00a0 For the remainder of 2012, I see investor risk appetites returning, and I see Apple and its competitors Microsoft and Google ($<\/span>GOOG<\/a>) <\/strong>leading a rally in technology shares.<\/p>\n

I recommend investors pick up shares of the Technology Select SPDR ($<\/span>XLK<\/a>)<\/strong> and plan on holding for the remainder of 2012.<\/p>\n

With the bad earnings releases of the third quarter mostly digested, I expect to see a broad-based market rally, and I expect more cyclical sectors such as technology to lead.<\/p>\n

Disclosure: Charles Sizemore is long XLK through his Tactical ETF Model<\/a><\/strong>. This article first appeared on TraderPlanet.<\/em><\/p>\n

The post Microsoft the Better Long-Term Bet, But Apple and Big Tech a Short-Term Buy<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

Related posts:<\/p>\n