Apple (AAPL): Back to $50

Buying an apple computer is a little like spending a lot of money on a meal at a trendy, expensive steakhouse. When your check comes you just can't get the feeling out of your head that even though it was good it wasn't worth twice as much as the steak you usually eat.

As for me, I'll take the trendy expensive steakhouse. Don't have to work on it, apologize for it, or worry if your gonna get sick. Such it is with a Mac... worth every penny... even a rabble rouser like Dougie boy knows this.

Veronica

The one thing this little note fails to mention is leverage and the fact that Apple has none. In fact, it's sitting on about 25bln in cash. That's far better than just about anyone out there. I have no fears of Apple being around when the market finally turns. I can't say the same about many other companies.

yes. Mac sales are 'peaking.' Almost up to 10% of the market share!

It won't peak when it hits 20% either, btw.

Apple has been ignoring the corporate market and those IT directors ever since Jobs returned to the company.

It is a good thing that "the Mac is relatively expensive compared to many PCs that have had to cut prices, in some cases, below $500 to keep customers coming in." Good quality products from solid companies don't need to be discounted like cheap quality products from desperate companies.

And please also mention that Mac notebook growth in that same month was twice that of the whole market.

Here is a bet I will make:

You say, "the basis of Apple's run to over $200 was that iPod sales would continue to be solid, the Mac would sell at a rate better than the overall PC market, and the iPhone would be Apple's new profit center."

After this quarter's results are announced, you will buy my Apple shares for $200 a share if iPod sales continue to be solid, the Mac would sell at a rate better than the overall PC market, and the iPhone will be Apple's new profit center (generate as much non-GAAP revenue as the iPod or the Mac). If not, I will buy 10K shares from you for $94 per share.

It is to be expected that people will reduce their levels of spending disposable income during a recession. In most cases it is simply a phycological effect, since 94% of the public that wishes to have a job does so. However, individual levels of localized satiation are reduced allowing for PC's to look more attractive.... This is all very natural and temporary.

As the economy recovers individuals will begin to spend more of their disposable income and to look for products that provide higher levels of satiation. Apple's growth will benefit greatly from this socioeconomic phenomenon. People still desire Apple's products but they "feel" in this environment it is prudent to save money on inferior goods rather than spend on normal goods where demand increases as income increase. This is all Chapter 1 of any Economics text.

So, the answer to your question is yes. Apple will see slowing growth over the next year and it's stock will reflect such slowing. As a long-term investor I will be looking to buy Apple at key support levels and hold for the inevitable rebound once consumers ease their fear and uncertainty.

$50 a share sounds great to someone looking to buy low and sell high.

Has not read any positive report from this blogger yet regarding Apple and I don't put too much into his writing. Apple stock price falls because of rumors like this kind of reports and analysts' guesses.

"The basis of Apple's run to over $200 was that iPod sales would continue to be solid, the Mac would sell at a rate better than the overall PC market, and the iPhone would be Apple's new profit center."

Interestingly enough, Mac and iPod sales are at an all-time high and the iPhone really is a new profit center.

"There are several reasons that Mac sales may be peaking."

This is based on one single month of data (November). In October, Apple shipments grew at 4 times the rate of the overall market, according to NPD (as quoted in the WSJ article). Mac desktops need a refresh but in November, growth in Apple's laptops still outpaced the market. Besides, PC manufacturers had to cut prices to maintain sales: "H-P and Dell offered discounts weeks earlier than usual this holiday season, dropping some prices by as much as 50%." Discounts won't help profits.

Let's face it. It doesn't matter how much Apple fanboys pump Apple to be the greatest company to invest into, it doesn't amount to anything. Apple is in the toilet just as any other stock with supposedly far less reserve cash or retail stores and looking more fragile than IBM or H-P.

So far, there have been four Apple downgrades in a span of seven days or so. Most analysts see Apple as a limp-wristed toy company that can't move enough of it's products in a poor economy. Sad to say, the majority rules and the juggernaut has been killed off. Look for more downgrades to come.

Hardly any investor cares about a company's cash reserve when the company can't sell enough products. That's why Apple's cash reserve continues to increase while the stock price continues to decrease. Apple is indeed a healthy company, but fanboys calling it a powerhouse company to invest into is outright fraud. It won't rise faster than any other decent consumer tech company when the economy recovers.

Apple has turned into an underperforming brick like any other tech company and is totally locked into a vicious cycle since it can't/won't build inexpensive computers. All the analysts are pointing this out and only the blind can't see this call.

The same people that swore on their mother's graves that Apple wouldn't go from $200 to $95 are still swearing that it won't go from $95 to $50. WS doesn't give a crap about Apple's innovative invincibility, deferred iPhone revenue or huge cash reserve. Apple will go down like any other two-bit company if that's how the majority of analysts see it to be.

I darn sure knew that hated Ms. Huberty's target price of $95 would be reached before beloved Mr. Munster's target price of $230. Even a blind fool should be able to tell that much. I'm not saying Apple's stock price will never go back up to $200, but it's such a long way off that it's not even worth arguing about.

I own and use nothing but Apple computers, but it doesn't change the fact that Apple has been totally screwed by the economy and Apple's stock will continue to reflect this well into next year. Sorry, but no miracles just for Apple.

Gotta love all the Apple haters grooving on the supposed Apple bad news. Apple is still in the juiciest part of every market--high-end media players, high-end cell phones, high-end laptops and desktops. Dell is living proof that moving a lot of low-end, low-margin boxes does not make for a high valuation.

I am happy typing this on my $400 laptop. I sure am glad I didn't buy the last generation Mac Notebook for $999 or the current generation one for $1300-$1400.

That said I own Apple shares @ $82 and am hoping more and more people pay $1400 for a Mac notebook. Pretty Please, Please Buy!!! Why? They have features like Email, Internet, etc. Arent all those things just amazing? Also if you want you can buy Office Productivity software from Microsoft!!!

Hmmm,
I've heard too pricey, in the toilet, brick, stupid fanboys, they have lots of cash because they're SO unsuccessful... blah, blah, blather, oh woe is Apple...

Instead try some facts... Go to a college campus, look in a kid's bedroom, go to any video production company, go to an ad agency, or most any Democrat's house... tell me what brand you see.

You folks still just don't get it, do you?

Oldsmobile is gone, but Mercedes is in still very much in business.

Sincerely,
NOTAFANBOY (just common sense)