Apple Inc. (AAPL): Will The Company Heed To This 3 Point Solution To Stop Negativity?

ISI Group analyst Brian Marshall said in an interview with CNBC that Apple needs a three-point solution to address investors’ concerns and wash away all the negativity affecting the company’s shares. He recommended that Apple should produce a  5-inch iPhone, a low-cost iPhone, and return cash to investors.

He explained that it’s important for Apple Inc. (NASDAQ:AAPL) to move to a 5-inch display iPhone because of the fact that more people want to purchase high-end smartphones with a larger screen. He noted that the most high-end smartphones featured in the mobile World Congress in Barcelona have larger displays. Apple needs to join the trend to maintain its market share.

A number of analysts were talking about a low-cost iPhone months ago. The analysts have similar views, and think that Apple needs to sell a cheaper iPhone to capture market share in the emerging markets where consumers are willing to pay $200 or less for a smartphone.

The third solution is to make investors happy by returning capital to shareholders through share buybacks, increasing its dividend payment or, as suggested by Greenlight Capital’s David Einhorn, issue a new class of security called iPrefs. Returning capital to investors should not be a problem for Apple because it has $137.1 billion in available cash.

ISI Group’s Marshall said: “This is a do-or-die moment for Apple,” noting that the iPhone, which contributes 65% of the company’s profits, is facing tremendous pressure moving forward.

Apple Inc. (NASDAQ:AAPL)’s Cook and his lieutenants are not deaf, and all they need to do is listen carefully to the recommendations of both investors and financial analysts. The company’s management should continue Steve Jobs’ passion for making Apple a great company. Apple should not allow itself to become or even be described as the J.C. Penney of the tech industry.

Marivic Cabural has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.