While Apple Inc. (NASDAQ:AAPL)'s calamitous plunge from more than $700 a share and the loss of its title as the largest company on earth may be the ultimate cautionary tale about flying too high, you must ask yourself where the stock is going from here. The company has been unfairly penalized for a slew of essentially arbitrary "problems" -- like selling a mere 47.8 million iPhones last quarter -- but there are some real concerns on the horizon, both company-specific and systematic to the market. Ultimately, I remain bullish on Apple Inc. (NASDAQ:AAPL) over the medium and longer term, but I think the stock is headed for $400 before it reverses and heads higher.
Positive catalysts With the rollout of the BlackBerry 10 OS and the new Z10 smartphone from Research In Motion Limited (NASDAQ:RIMM) (know known as BlackBerry), Apple Inc. (NASDAQ:AAPL) investors can cross any immediate threat to the company's U.S. sales off the list of concerns. The Z10, which did get some favorable reviews, will not be released for sale in the U.S. until March. While it is doubtful that the struggling BlackBerry will be able to make a meaningful dent in Apple's numbers, as the earnings release showed, a few million units can matter; the 47.8 million iPhones referenced above fell short of the 50 million that many were hoping for from Apple Inc. (NASDAQ:AAPL). Remember, since we are talking about the immediate path of the stock, the competitive forces that play out in the next month are critical.
Additionally, Apple just announced that it is releasing a 128 GB iPad to meet some of the storage concerns of business users. The larger capacity is specifically targeted at users that have large memory requirements, and it's a positive for Apple because it can capture a stronger margin while remaining competitive. The device is set to be released just days before Microsoft Corporation (NASDAQ:MSFT) releases the new Surface Pro tablet on Feb. 9. The fact that Apple Inc. (NASDAQ:AAPL) is signaling the importance of enterprise users is a positive.
Negative catalysts The flip side of the large capacity iPad announcement coin is the fact that the Surface Pro is set to be released. While I think that the device has the potential to be a disruptive force over the long term, any type of positive reception has the potential to hit Apple Inc. (NASDAQ:AAPL)shares hard. The market has been overlooking positive news for the company and hammering it on bad-to-neutral news. If the Surface Pro has a successful kickoff, particularly in the press and blogosphere, investors may take the stock down, even if the move is only temporary and even if it is only to send a message.
The way Apple has been reacting to news lately, it feels like anything short of negative reviews of the Microsoft device threatens the immediate path of Apple shares. Given my positive outlook on the new Surface Pro and its ability to change the entire mobile computing landscape, I see it acting as a real negative catalyst.