updated 07:45 pm EST, Fri March 1, 2013
Pundits fear competition, productions issues hurting Apple
On Friday, AAPL closed the week by dropping nearly $11 to $430.87, its lowest point since January 2012. The stock has now lost nearly 40 percent from its all-time high of $705 a share, and despite healthy sales forecasts and a string of better news for the company, including the dropping of David Einhorn's "silly sideshow" lawsuit over the issuing of preferred stock. The falling price comes in the face of Wall Street managing to eek out a tiny gain for the day, in spite of news that congressional leaders are unable to avoid the so-called "sequestration" crisis.
Much of the malaise that has struck AAPL appears to be rooted in concerns by professional investors that Apple has not done enough to fend off increased competition from rivals such as Samsung. In particular, the upcoming flagship Samsung phone, the Galaxy S IV, is seen as likely to do very well against the iPhone 5 -- Apple's single biggest-selling product. Concern also lingers about the Mac product line, which has seen severe production constraints that have hindered sales.
However, the iPhone has in fact seen gains against its Android rivals in the US market of late, and rumors have it being supplanted with an "iPhone 5S" type model sometime during the summer. Nonetheless, concerns are that Samsung will continue to do better than Apple overseas and in emerging markets such as China, where Apple still does not have a deal with China Mobile -- an enormous opportunity for the other smartphone companies. There is not, however, much evidence as yet that more sales for Android models hurts the iPhone much: at present, Android sales appear to mostly cannibalize former BlackBerry, Nokia and other Windows Phone customers.
Pundits also express concern that the iPad could lose its dominance in the corporate and enterprise sectors as more business-oriented models come to market, such as Microsoft's Surface Pro (which has thus far not made much of an impression, though future revisions could improve its chances). Apple has already seen some erosion in the business market on the very low-end of tablets, with some Android models being deemed fit for more basic business uses. Presently, however, the iPad is still the overwhelming favorite among enterprise and "bring your own device" (BYOD) workers.