Apple Inc. (AAPL) Taps a Fresh Low. How Bad Could It Be?

Page 1 of 2

If Apple Inc. (NASDAQ:AAPL) investors thought they had already seen shares hit rock bottom at $435 shortly after last quarter’s earnings release, they were wrong. As the sequester technically begins today and the market opened lower, Apple Inc. (NASDAQ:AAPL) gapped down and was significantly lagging the market with losses of 2%, tapping a fresh 52-week low below $432 first thing in the morning.

Apple Inc. (NASDAQ:AAPL)What was rattling shareholders?

It’s over

The only notable commentary out before the close was a research note from BMO Capital. The Mobile World Congress, a conference where gadget makers like to show off their newest mobile devices, wrapped up last night in Barcelona. Of course, Apple Inc. (NASDAQ:AAPL) never attends MWC since it likes to unveil its products on its own terms, and the Mac maker pulled out of all third-party trade shows years ago (even Macworld) as it was looking to take further control over its press events.

MWC still has important implications for Apple Inc. (NASDAQ:AAPL), though, since many of its competitors attend, providing a useful preview of what rivals have up their sleeves. It’s for this reason that analyst Keith Bachman had some negative things to say about Apple’s prospects.

After conversations with wireless carriers and distributors that operate in Europe, Latin America, and the Middle East, the general consensus is that while the iPhone 5 is a solid device, it’s simply not “materially different” from the previous generation iPhone 4S, while competing flagship devices like Samsung’s Galaxy S III are grabbing more attention. These mobile entities believe that the iPhone needs a larger display in order to effectively compete.

Bachman is modeling for 37.8 million iPhone units sold in the current quarter, which should decline sequentially to 34.5 million units in the June quarter. iPad units are estimated at 18 million and 19 million over the next two quarters, respectively. The analyst thinks these estimates are still “reasonable” but acknowledges that there’s more downside possibility than upside given the competitive landscape.

Timing is everything
While Tim Cook gave no solid clues at the annual meeting on when Apple will increase its dividend payout, Bachman thinks this announcement will come before the next earnings release. It’s widely considered the next big catalyst for the stock (assuming the iPad product cycle has indeed been pushed out to later this year).

Apple’s fiscal second quarter report takes place at the end of April, and last year Apple announced its dividend reinitiation in March, so this timing would make perfect sense since companies typically change dividend payouts on an annual basis.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!