Apple Inc.'s (NASDAQ: AAPL) stock has lost 15% of its value since it peaked at $202 a few weeks ago. How much further will it drop?

Apple partnered with AT&T Inc. (NYSE: T) for the introduction of Apple's iPhone. Bloomberg News reports that AT&T's CEO see softness in consumer markets. As people foreclose on their homes, AT&T is disconnecting more home-phone and high-speed Internet customers for failing to pay their bills. Are iPhone customers too affluent to stiff AT&T on their bills?

Meanwhile today's introductions of new Mac Pro computer and Xserve server products have not helped Apple's stock which dropped $6.39 today. At a Price/Earnings to Growth (PEG) ratio of 1.6 -- on a Price/Earnings ratio of 45 and earnings growth of 28% to $6.49 in the year ending September 2009, Apple stock does not look cheap.

Does Apple have further to fall or is it a screaming buy at $171?

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Will AT&T's bad news feed the Apple blues? originally appeared on BloggingStocks on Tue, 08 Jan 2008 18:37:00 EST. Please see our terms for use of feeds.