Apple has taken a serious beating over the last 6 weeks falling from an all time high of $202.96 down to its current value. The logic and reasoning behind this fall is a mystery to those looking from the outside in. The company has posted incredible earnings and continued growth, but the stock was still assaulted by the market.
Some believe that the reason for Apple’s decline is that the iPod’s popularity has peaked and are now headed back down from their astronomical levels. Another theory is that the iPhone has been a flop for Apple thus far. This could easily be fixed by further lowering prices, and offering other carriers, besides AT&T, which currently has an exclusive carrier deal with Apple.
Just today BMO Capital Markets analyst Keith Bachman cut his target price for AAPL from $160 to $140 citing several factors. Bachman believes that the company previously had three growth drivers, the iPod, iPhone and Macs, which he now believes is down to only Macs. The company’s PC sales are still growing, and they are quickly stealing market share from larger competitors like IBM and Dell. The analyst raised his Mac sales estimates to 9.4 million units from 8.2 million for Apple’s current fiscal year, which ends in September. Bachman also raised his forecast for Mac sales for Apple’s current quarter to 2.06 million units from 1.87 million.
Apple’s newest release is the MacBook Air, an extremely thin and light laptop, which still retains all of the expected features of an Apple. The superior operating system, incredibly long battery life and great antivirus features make the product superior to all rivals and should boost mobile PC sales for the company in the upcoming quarters. With over $24 billion in sales for fiscal 2007, and an aggressive growth strategy, Apple at $119 could be a dream come true, but with an unpredictable market, and 6 weeks of unexpected declines, it could also be a nightmare.
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