Maybe a certain group of investors feel their growth is unsustainable in the long-term. The history of cell phone companies is replete with examples of rise and falls. In the early days, Ericsson and Nokia were popular. Motorola had a little run, then the Blackberry craze took over and was known as Crackberry. Is it too far of a stretch to think iphones won't be as popular several years from now? Competitors will surely come out with similar features at a lower price (Samsung and HTC), thus commoditizing Apple's premium pricing. At a certain point the iphone/ipad will hit the law of diminishing returns. However, for now it's a mo-mo favorite.
It's more than that with Apple users! It's almost like a cult following and it goes way beyond the Iphone
Every other phone is a joke, and not as much of a must-have utility when you combine the apps, iTunes, and informational usefulness. It isn't just a phone company because there's way more infrastructure behind it than anything other companies are offering. The app store alone is filled with apps that I would say are ingeniuous, and not available on other phones because they don't have partnerships with other device makers.
I'm amazed people will pay $50-70 a month for a smartphone to text and do other worthless crap and yet complain that gas prices are too high. Also they'll buy an $800 ipad yet complain that prescription drugs are too high. Bizarre world.
its much worse than that. people buy 15x overpriced coffees at Starbucks. don't complain about 18 trillion dollars stolen by the private reserve bank (not federal...) complain about high drug prices, yet sunshine is way more effective, without side effects and free. Apple products might be 3x overpriced, but who cares. there is too much money, too much goods, too much production capacity in the world. oh, and did i forget too much real estate and too much energy? there is huge abundance of everything in the world and universe. to sell something at a high price, you have to use clever tricks... it was always that way.
I don't really see what starbucks has to do with anything. Apple's iPhone doesn't seem extravagantly priced, having paid $400 once for a Palm Treo unlocked, and $300 for a Blackberry pos. The $440 I paid for a 32gb iPhone4 is a real bargain compared to how pathetically unuseful those other phones were. Also remember the Samsung Blackjack I had which I never synched to windows. The iTunes product is more than enough reason to buy all of their media devices.
Nice 2006 article quote. Here's a more recent one http://blogs.mccombs.utexas.edu/titman/2010/03/01/more-thoughts-on-the-value-of-saudi-aramco/ Estimates range from 2 to 7 trillion.