One of Wall Street’s most notorious bulls has found itself in unfamiliar territory, but some analysts fear the bottom has yet to be reached by Apple's stock price.
On Sept. 18, the tech giant reached its all-time high, $701.10, but Friday closed at just above $547, clearly in bearish territory.
Doubleline Capital CEO Jeff Gundlach told CNBC the Cupertino, Calif., powerhouse could drop as low as $425 in the near term.
The reasons for the drop are many, experts said.
It all starts with the death of Apple founder and visionary Steve Jobs.
“What's the future creativity from Apple? They've always been able to create new markets none of us realized we needed," David Readerman, portfolio manager at Forward Management, told Reuters. "It's to be determined if they can continue to do that."
Dan Crow, a former Apple and Google software engineer, outlined several signs for Apple’s decline.
“The most visible recent one is the Maps debacle,” Crow wrote in the Guardian.
“Replacing Google Maps with an obviously inferior experience shows how much Apple has changed. Apple's success had been all about offering users the best possible experience; suddenly it is willing to give users a clearly worse experience to further its corporate interests — in this case its long-running dispute with Google. We might expect this sort of behavior from Microsoft, but we don't expect it from Apple.”
Crow identified several other recent missteps. He found both curious and annoying that Apple rolled out the iPad4 only six months after the heralded iPad3. The newer version had Retina Display, but otherwise did not substantially raise the stakes from the earlier iteration and in fact annoyed users who had recently purchased the iPad3. “This insipid update is not the sort of magical product launch on which Apple has built its reputation,” he wrote.
Apple’s overdriven hype machine also seems to have lost its way with consumers, with jumbled messages and promises not kept. “Steve was famous for his 'reality distortion field.' I saw it up close and personal, and it was amazing” Crow said.
“But Steve knew that when he turned on the hype, he needed an outstanding product to back it up. The reason he could seemingly bend reality to his will was that products like the iMac, the iPod, the iPhone and the iPad really were exceptional, breakthrough products. Steve's showmanship was justified.”
He compared those successes with the newest versions of iPad and iPhone, which have both met with mixed reviews despite the breathless spin from Apple. “Steve knew how to balance hype and product,” Crow wrote. “Apple today seems much less adept at this.”
The loss of key Apple employees such as Scott Forstall and John Browett have also been mentioned for Apple’s diminishing presence in the marketplace.
Browett ran Apple's retail stores and his seven-month tenure was considered disastrous, as customer service took a back seat to profits, Crow charged, a departure from Apple’s previous reputation as consumer friendly. Forstall is a software engineer who headed mobile software development for Apple.
Add in the success of Samsung’s Galaxy S III smartphone overtaking the iPhone as the biggest selling smartphone and the success of Amazon’s Kindle tablets have pinched Apple’s profits.
Another factor is that Foxconn, Apple’s Chinese manufacturer, continues to struggle with both bad press on how it treats its employees and an inability to meet demand.
Apple executives reminded investors in last fiscal year, which ended Sept. 29, Apple’s revenue jumped 45 percent to $156.51 billion and its profits rose 61 percent to $41.73 billion. The upcoming holiday season will tell whether those record profit days are over for Apple.
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