Apple Inc (AAPL)

[investora2z]

As per a report on seekingalpha.com, the drop in the share price of AAPL are primarily due to a significant drop in expected EPS from $13.50 per quarter to around $10 per quarter. Obviously, that changes the entire equation. However, the performance, when viewed in isolation of the expectations, is not that bad (so far). One major pointer to that is that AAPL has a chosen and continued ability to avoid competing in lower price segments. Its products are still able to demand a premium, and customers are willing to pay for that. Though the Apple mania may have declined, the market itself is growing at a brisk pace. The current gloom over AAPL could be the fact that people started to expect too much. Basically, the phenomenal growth story can not continue forever and forever. At some point, the growth has to moderate, and one should give the stock due credit for its past performance. Its future has to be viewed in the context of new developments and emerging competition. The bottom line is, that Apple will remain Apple and the brand strength, iconic status etc. will not dissipate into thin air. It will continue to command a significant market share in the foreseeable future. This of course is based on its ability to innovate and deliver products which justify the premium. It is not easy for Apple to become Blackberry unless some major disruptive technology comes. The growth in the emerging markets is just starting to pick up, and all said and done, having a Samsung in your hand is still not as good as having an iPhone or iPad. In addition, there is risk of lawsuits, especially in light of the booming patent monetization market (the likes of Vringo (VRNG), Marathon Patents Group (MARA), Spherix Inc., (SPEX) etc.). Considering the strength of its balance sheet, Apple has the wherewithal to handle all this and more.