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What Do the NYC Subway System and My Supermarket Say About Apple?


The subway system is a melting pot of information on the mobile device industry.

For anyone remotely interested in consumer trends, the single greatest research tool on planet Earth is the New York City subway system.

New York City is a world center for art, fashion, business, and media, and the subway is jam-packed full of forward-looking people who tend to get in on new trends early.

And importantly, these people come from all over the economic spectrum. It's not uncommon for an investment banker in a $5,000 Brioni suit to be standing next to a homeless man wearing pants made out of the Sunday New York Times.

So what happens here leads what goes on elsewhere.

Now, I've been commuting daily on the subway for over 20 years, and that means I've seen it all. And I'm not just talking about the fights, the drug use, and the nudity, I'm talking trends.

I saw Apple (NASDAQ:AAPL) iPods all over the subways well before they became mainstream products. Same with the iPhone, the iPad, and the Amazon (NASDAQ:AMZN) Kindle.

I also saw several brands and product categories rise and fall, though to be fair, it's only easy to spot a turning point in hindsight.

There were times when it seemed like on the subway, every adult had a BlackBerry (NASDAQ:BBRY) and every kid had a Nintendo (PINK:NTDOY) DS, and looking back, both probably indicated peaks.

The reason I bring all this up is because of my ongoing struggle over what to do with my long-held Apple stock position, which took another beating on Wednesday after negative analyst notes from Citigroup and Berenberg Bank.

Citigroup said that iPad and iPhone demand is slowing, and that Apple's revenues will come in below its guidance. On Berenberg's side, their analyst said the smartphone market is seeing developed market volumes top out, similar to what happened a decade ago within the handset industry.

Now, as an Apple shareholder, I don't want Apple to have seen its best days, but it's a scenario I have to consider, based upon what I see on the subways, which incidentally echo what Berenberg wrote.

So yes, I'm waffling. There are more than enough bravado-filled cocksure know-it-alls throughout the financial media world to go around as it is, and I'm trying to stay as far away from that camp as possible.

Ten years ago, it wasn't common to see Apple products in public. Even iPods weren't all that popular back then. But today, it seems like everyone on the subway in New York has an iPhone or iPad, and every coffee shop is jammed wall-to-wall with MacBooks.

Kind of reminds me of when everyone had a BlackBerry. Or when every kid had a Nintendo DS.

Furthermore, I've been noticing something really interesting when I go shopping at my local supermarket.

Most of the people working there have smartphones, many of them iPhones.

I realize I'm walking a fine line here. I am not putting down anyone who makes an honest living. But let's get real: most people working retail get paid lousy money. What does the fact that people with low incomes can afford smartphones say about how far that market's been stretched?

When I worked in a supermarket, circa 1996, there was no way I could have afforded any kind of mobile phone.

Hell, I could barely buy a meal off the Wendy's (NASDAQ:WEN) Dollar Menu and I was wearing $5 outfits from the Salvation Army. The only person I worked with who had any real money turned out to be robbing the place blind -- he was caught with a stockpile of personal hygiene products in his car.

You know, it's funny. In terms of stock market valuations, the PC industry basically peaked when computers became affordable to the average person. Even through the boom in PC sales during the last decade, Microsoft's (NASDAQ:MSFT) and Intel's (NASDAQ:INTC) stock prices basically flatlined, despite huge revenue and earnings growth.

Could the same be true for Apple? Did Apple's stock peak around the time its products saturated the mainstream?

When everyone can have something, by definition, it is not sexy.

At that point, it's barely interesting.

Disclosure: Minyanville has a business relationship with BlackBerry.
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