Last Updated Jul 13, 2010 1:15 PM EDT
There would have to be a catalyst for the reversal of fortune, and I speculated that it would be the bad publicity that Apple has been receiving for reception problems on its iPhone 4. Right on schedule, Consumer Reports issued a bad review of the phone Monday, citing the reception issue. Here are some of the organization's comments:
"It's official. Consumer Reports' engineers have just completed testing the iPhone 4 and have confirmed that there is a problem with its reception. When your finger or hand touches a spot on the phone's lower left side - an easy thing, especially for lefties - the signal can significantly degrade enough to cause you to lose your connection altogether if you're in an area with a weak signal. Due to this problem, we can't recommend the iPhone 4."
The seal of disapproval could be devastating. Apple disciples are going to buy the iPhone 4 no matter what, and techno-freaks of other persuasions will buy equivalent models from different manufacturers, such as RIM.
For many consumers among the great majority who just want the best phone and have no attachment to one or another brand, however, a bad review from a respected mainstream source like Consumer Reports could be enough to turn them off the idea of buying an iPhone 4 and send them into the arms of one of Apple's competitors.
The panning by Consumer Reports isn't likely to die quietly, either. The story was picked up immediately by The New York Times.
The prospect that the dissing of Apple and the iPhone 4 will go viral may have moved to the forefront of investors' thinking about the company this week. Apple's stock fell nearly 1 percent on Monday and was down about 3 percent in early trading on Tuesday with the broad market sharply higher. RIM rose nearly 1 percent on Monday and a further 3.7 percent Tuesday morning.
Since July 6, the date of the post comparing the two stocks, Apple is flat and RIM is up about 16 percent. That begins to correct the valuation discrepancy between the two companies, but it still has a long way to go.