Skullcandy Inc (SKUL), Apple Inc. (AAPL): One of 2011’s Most Disappointing IPOs Could Get Even Worse

Apple has long seen the value in bundling earbuds

It isn’t a stat that Apple Inc. (NASDAQ:AAPL) analysts pay attention to, but sales of the company’s iconic, white earbuds have no doubt played a key role in Apple’s resurgence.

They formed the basis of the company’s iPod advertising; and, in the process, becoming a sort of status symbol.

Apple isn’t giving up on its earbuds anytime soon. Last year it refreshed them, unveiling the new “EarPods” alongside the iPhone 5. Apple continues to bundle earbuds with all its iPods and iPhones.

Investors shouldn’t expect another refresh this year — last year it said the EarPods had been in development for three years — but it will be interesting to see if Apple does anything special for its widely rumored colored iPhone.

Apple is expected to an unveil a cheaper, plastic iPhone available in different colors this fall. The iPhone 5C (as it’s rumored to be called) will likely be aimed at consumers on a budget.

Investing in Skullcandy

Skullcandy has been a terrible investment since its IPO, and though it’s been heavily shorted, the bears have been completely right thus far.

Now trading with a below-market price-to-earnings ratio of 14, Skullcandy is more reasonably priced, and could be due for a resurgence.

However, I wouldn’t bet on it. Mobile devices makers like Motorola, LG, and Sony are increasingly bundling headphones with their devices as a way to differentiate them. Apple, which started the trend, isn’t getting away from it anytime soon.

For now, investors should continue to avoid Skullcandy.

The article One of 2011’s Most Disappointing IPOs Could Get Even Worse originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Skullcandy. Sam is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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