Worried Investors Continue to Chew Away at Apple's Share Price

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News Posted: Tue, Jan 15 2013 1:25 PM
Apple's share price is lingering around the $488 mark, down more than 30 percent from its 52-week high of $705.07 just prior to the iPhone 5 launch. Shares of Apple stock dropped to as low as $483.80 earlier this morning, and is on pace to the close the day below $500 per share, which would be the first time that's happened since February 15 of last year.

There are a number of reasons why Apple's stock has fallen over time, but in this particular instance, it's due to recent reports that Apple reduced orders for iPhone 5 components due to weaker than expected demand. Sterne Agee analyst Shaw Wu refuted the notion in a note to investors today, but it came as little consolation to investors.

Apple Store

"As far as we can tell, iPhone 5 demand remains robust," Agee wrote.

Wu said that the reduced component orders is probably the result of improvements in Apple's production. Fewer components are needed to yield a greater number of iPhone devices, as well as for other products like the iPad.

It's a plausible explanation, but investors seem to be looking for any reason at all to dump Apple stock these days. Perhaps many of them got caught up in the pre-release iPhone 5 hype and the fact that Apple's share price was trading at an all time high, and now have buyer's remorse. Dumping stock so quickly could bite them in the backside, however, as Wu believes Apple's share price could reach $840 in the next 12 months.
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RiCoFrost replied on Tue, Jan 15 2013 5:33 PM

You cant stay on top for long. Too many other companies are now making much better phones. New features and better quality.

With iphone 5's bending and scratching easy and the maps system people have lost faith in apple. I still believe the iphone 3s was by far the bast one.

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I don't think the numbers support the notion that people are losing faith in Apple. Heck, Apple in December announced that iPhone 5 sales topped two million in China in just three days after its launch. That's hard to do if people no longer like your product.

The bigger issue, I think, is that Android phones have matured to a point where the top-end devices are every bit as good as the iPhone, and arguably better (there are certainly better spec'd Android devices). That, and Samsung has done a great job marketing its Galaxy line to the masses.

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sevags replied on Tue, Jan 15 2013 10:05 PM

We all know stock price when it comes down to some companies has nopthing to do with their bottom dollar.... Just like Cisco back around 1998 I want to say? Inflated stock price based on stock trading and not much more and then boom the baloon burst. Apple stock is definitely worth good money based on their performance but was it worth the $700+ per share no way and this is just the market bringing Apples stock price back down to reality and it only took facing reality to do it.

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Dave_HH replied on Tue, Jan 15 2013 10:25 PM

You, Uncle Pauly are spot on. Apple finally has competition. This is just proper adjustment right sizing for the stock. If Apple comes out with the next "big thing," as they have been known to do in the past, their stock will likely scale back up. The key word here is execution. So what's next?

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basically apple need to get on the vuzix and google glass band wagon and give us a proper hud......

thats the next thing for apple at the minute....

other than that apple are and have been doing something that other companies havent been doing as well

their products generally dont break..... obviously if you throw it against a wall it will but in general both its hardware and software are sound.....

most of the guys that were trying to jailbreak the new os found it difficult enough......

so all in all i can see appe recovering from this no problem.....

give them 6 month MAX....

and theyll be back up to usual trade price.

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rapid1 replied on Wed, Jan 16 2013 9:12 AM

I had written up a big reply to this but I deleted it. Basically I just do not see it personally. The Chinese market is big but with the current consumer view of Apple going down will no one in China see that? Then on top of that I can get a better Android device hardware wise now for half the price and it does as much or more. I also do not think Apple has the individual to market it as they did before. Not to mention they are still going by a written instruction list from that previous individual. I do not see it advancing! When you get a small hole in a dam the water flowing through it makes said hole grow. After it grows for a few minutes your big strong dam wall disintegrates. When the only person you had who could repair said hole no longer exists in your dam it will disintegrate eventually. While I know Apple will not completely die out as a company I do think they will continue to drop for a while. If you do not believe me look at Palm then look at RIM, while RIM may be trying to come back and have the current promise of doing so it will be a percentage of what they had last year which was a percentage of what they had the year before and so on and so on. Apple has to much external market now to do what they did but there market also has flaws all around with enough to spread among there market areas causing more over all drop in value. As far as it goes when it dropped below $700 people said buy it will go back up and above that in 6 months. It did not and is now below $500 so it has lost almost 300 dollars per share from its high. That drop is more than 2-3 shares of some very large very powerful companies.

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