Confusion over iPhone 5 leads to dip in Apple stock value

News Richard Goodwin 18:00, 18 Apr 2012

Increased competition from Google and confusion over the iPhone 5 has resulted in five days of consecutive losses for Apple’s stock value

Increased competition and confusion about the iPhone 5 has resulted in Apple’s stock dropping in value for five straight days. Has the bubble finally burst?

Not just yet. At over $614 a share Apple is still the world’s most valuable technology company – and by quite a long way, too. Amazon’s stock ($196 a share), for instance, looks practically affordable when viewed next to Apple’s at its current value.

However more and more investors are cashing in their stock, and this is something that is expected to continue. ‘More cautious investors are re-evaluating their positions and cashing in some holdings ahead of Apple's second-quarter earnings next Tuesday,’ reports Reuters.

It added: ‘There's reason for caution: Apple's shares surged nearly 60 percent to a high of $644 this year. The slightest sign of trouble in the earnings report may prompt further profit-taking.’

This isn’t the first time Apple’s lost stock valuation despite great sales and even better future prospects. Back in October 2011 Apple failed to meet Wall Street’s predictions. This resulted in a seven per cent drop in value, illustrating that even Apple has bad days.

How much bigger can Apple get? Over $600 a share is pretty ridiculous as it is – could it hit $700 or even $1,000 eventually? Maybe – given time, the right product launches and a bit of luck. But it’s the next few months that Apple needs to worry about according to Channing Smith, co-manager at Capital Advisors Growth Fund.

Speaking to Reuters, Smith said: ‘any disappointment in Apple could lead to a significant sell off in the short term.’

He added: ‘are we long-term believers in Apple? Absolutely, but as we move forward...you get up here to over $600 and you say, ‘Hmm, this is getting pretty frothy, expectations may be getting out of line.’

Apple is estimated to have sold between 30 million and 35 million iPhones and around 13 million iPads on average last quarter, according to Wall Street analysts.

Can Apple sustain this rally indefinitely though appears to be the more sensible question?

There’s a first time for everything – but we wouldn’t bet on it long term. No one stays at the top forever.

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