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Our firm bought Apple shares for clients’ portfolios in 2013. We are used to being a contrarian voice when it comes to the stock (read here and here) – we loved it when it was hated. Now we are contrarian again – this time going against the company’s faithful.

Here are key reasons why we sold our entire Apple stake just last week:

The iPhone, though indispensable, is a mature product. Since the introduction of the iPhone X, Apple has been raising prices on iPhones. For instance, last quarter iPhone sales revenue jumped 24% despite the number of iPhones sold not changing – all growth came from higher iPhone prices. Smartphone penetration is high globally, and thus most of the growth currently comes from replacement phones. Higher prices and lack of significant incremental improvements will likely lead to elongation of the replacement cycle from two years to three (or possibly four).

Recently Apple announced that it will stop disclosing iPhone and iPad shipments. There is only one way to read this news: The iPhone is a mature, middle-aged product with a wife and two kids. Apple’s management is desperately trying to create the narrative that it is becoming a service company. The second line of Apple’s quarterly press release says, “Services Revenue of $10 Billion Reaches New All-Time High.” Apple is trying to monetize its enormous installed base of iPhones, iPads, and Macs by selling digital goods and services to their owners.

This is where we lost optimism further. Apple has done a good job of selling digital goods (apps, movies, music, shelf space) in its digital store, but so far it has proved to be a lousy services company. Its iCloud (email, calendar, data storage) and Apple Maps have been either outright failures or much-inferior products. Apple’s email (originally known as MobileMe) and iCloud data-storage service were basically rendered irrelevant by Google’s Gmail and Google Drive (and Dropbox). Apple Maps is only in business because it is the default map software in the iPhone. Google is light years ahead in accuracy when it comes to maps – just ask anyone who ever tried using Apple Maps.

In addition to Google, Apple competes in services with another giant,, which is spending hundreds of millions of dollars on movies and music. Apple’s streaming music service was initially a disaster. In all fairness, it has improved, but today it is fighting an uphill battle because Apple’s walled-garden approach doesn’t allow Apple Music to work on Amazon’s and Google’s speakers. [Ed. note: On November 30, it was announced that Apple Music is coming to Echo devices in the coming weeks.] This gave plenty of breathing room to competitors, who otherwise would not have had a chance.