Explaining Southern California's economy

FAQ: Why is Apple's stock sliding? And how low can it go?

A view of the main entrance to Apple Inc.

AFP/AFP/Getty Images

A view of the main entrance to Apple Inc. in Cupertino, California. The company's stock has been crushed over the past few months. How low can it go?

Last year, Apple's share price rose above $700. Some analysts started getting all crazy with their predictions for where it might go. Could Apple hit $1000 and become the world's first $1 trillion company?

For a while these calls didn't look so crazy. As a company, Apple was a beast. It could do no wrong. The declines were inevitable, but temporary. The stock would always recover and resume its inexorable match to quadruple digits.

Apple dipped below the psychologically important $500 per share barrier this week (it's since recovered a bit as investors waiting for it to dip below the psychologically important $500 per share barrier piled in). There are some serious and well-respected investors who are bearish on this stock. Jeff Gundlach, of L.A.'s DoubleLine Capital, is one of them. He's set a target price for Apple of $425.

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All I want for Christmas is an Apple iPad...or maybe an iPad Mini...but a iPod or iPhone would be OK, too

A third or more of U.S. kids between 6 and 12 would very much like to have an Apple device this holiday season.

Former Internet analyst Mary Meeker has produced another of her "state of the Internet presentations," as venture capitalists (and avid blogger) Fred Wilson called it. Meeker is  a VC too now, at the blue-chip Silicon Valley firm Kleiner Perkins Caufield & Buyers. 

The presentation that Fred notes can be viewed on SlideShare and is 88 slides long. It covers a lot of ground. But the slide above is particularly interesting, heading into the the crunch period of the holiday shopping season. You know, the time of wish lists children write and, in some cases, mail to rotund, bearded figure of legend who lives in the northernmost reaches of the planet with a band of industrious elves and a group of reindeer capable of impressive aerial feats. 

Meeker notes that American kids between 6 and 12 want iPads and iPad Minis in impressive numbers. They want iPod Touches and iPhones in nearly equally impressive numbers. 

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Debate hath ended: iTV coming from Apple this year

Apple's New iPhone 4s Goes On Sale

Justin Sullivan/Getty Images

Coming soon to an Apple Store near you: iTV?

Will they or won't they? That's been the burning debate in tech/Appleology circles over whether Cupertino will roll out a high-end, thoroughly Apple-ized high-def TV. I've been pondering this question pretty regularly, given that I think Apple is at the tail end of an innovation cycle that started with the iPod (reinvented music), then moved on to the iPhone (an iPod with a phone, re-invented mobile), and then brought out the iPad (a big iPod, poised to decimate the low-cost PC market). What's next?

A TV set — versus the current AppleTV box — seems obvious. The reinvention factor will be the delivery of TV content. And therein lies the challenge: Apple has put, in sequence, the music industry, the wireless industry, and the publishing industry at its feet. Will Hollywood and the cable companies agree to play by Apple's terms?

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The hot Apple time machine

Apple Announces Digital Textbooks Service At Guggenheim

Mario Tama/Getty Images

Apple's new iBooks 2 app is demonstrated for the media on an iPad at an event in the Guggenheim Museum, January 19, 2012 in New York City.

We've all done it. Lamented the fact that we didn't load up on Apple stock back in the day, when it was trading at $10 or $15 a share and and the company, with Steve Jobs in exile, was fumbling toward bankruptcy. 

What a difference a decade makes. Apple is now either the most valuable company in the world or among the most valuable, depending on what the stock market is doing on a given day. Fifteen bucks a share to $533. Zowie!

Oh, how easy it is to set the investment time machine to 1999 and say that you would have bought AAPL instead of sinking your dough blindly into a 401(k) or chasing a dot.com "superstar," post-IPO.

At USA Today, Matt Krantz throws some cold water on that nostalgia trip. Should you consider Apple, which has risen nearly 5,000 percent since 1999, the big beating heart of a current retirement plan? Nope:

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Apple vaporizes estimates for first quarter earnings

Mercer 19876

Shereen Meraji/KPCC

The new Apple store at the Americana in Glendale.

Any questions? The consensus on Wall Street was that Apple would earn $10.14 a share and record $39 billion in sales for its first fiscal quarter, according to Bloomberg. Instead, it did $13.87 a share on $463 billion in sales. Eyes are still being put back in their sockets:

"Those numbers are just unimaginable," said Michael Obuchowski, chief investment officer at First Empire Asset Management, which has $4 billion under management, including Apple shares. "It’s still an extremely well-managed company and they are showing that the product pipeline is sufficient even now to generate growth rates that are unrivaled."

Apple is now pretty darn close to being a $400 billion company, by market capitalization. It currently has two major things going for it: it's vacuuming up more and more market share for smartphones, as these devices become much more popular and begin to define the future of mobile computing; and it's ideally positioned to thrive in the post-PC age, as consumers shift away from old-school laptops and desktops and move to ultrabooks and tablets.

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