In the past two weeks, we've seen a bit of a turnaround for
), the world's most closely watched technology company.
The stock has jumped from its April 19 low of $385 by 15%, possibly
signaling a rosier outlook for the company -- or at the very least,
a reprieve from the endless negativity seen heading into its April
23 earnings report. which was pretty decent.
One simple but effective illustration of said negativity comes in
the following chart, which plots Apple's stock price vs. the
average analyst target price:
Click to enlarge
At the start of the year, the average target price was at $735. It
hit $540 on April 22, the day before earnings, and stands at $533
And on a different note, Apple pulled off the largest corporate
bond offering in history on Tuesday, selling $17 billion in bonds
to aggressive buyers.
In terms of maturity, Apple's bonds go out as far as 30 years, and
the high demand for them pushed yields down to fairly low levels.
So if people are not demanding significant compensation for the
risk of owning Apple bonds, what does that say about perception of
In a word, confidence -- despite the fact that, as many others have
pointed out, the mobile device industry has historically been the
land of booms and busts.
If you want to see some volatility, think about Motorola's
adventure over the past 10 years.
From 2004 to 2006, Motorola's fortunes improved in a huge way with
the uniquely ultra-thin RAZR mobile phone. I remember when people
were paying $500 for those bad boys!
Then in 2007, when the iPhone hit and Motorola didn't have a solid
follow-up to the RAZR, it was game over... until 2009. Motorola got
right back in the saddle toward the end of that year, launching the
original Droid, the smartphone that put
) Android on the map.
Motorola hung in there for a while before succumbing to Samsung's
wildly successful Galaxy smartphone line. (See:
Motorola Results Point to Apple, Samsung
And what's happening in 2013? Motorola device sales are flat-out
collapsing, with a 54% year-over-year decline in revenues in the
first quarter of 2013.
The ups and downs aren't unique to Motorola. Just look at
), Palm, and
), who have all had periods of joy and misery throughout their
So it's obvious that it's pretty common for device companies to go
from hero to zero rather quickly.
Time will tell whether the resurgent confidence in Apple makes
In Apple's favor, within the history of the modern smartphone
industry, its streak of success with the iPhone is only rivaled by
BlackBerry's astounding run from 2002 to 2008, when it was still
under the Research In Motion name.
Plus, Samsung's highly-anticipated Galaxy S4, the follow-up to the
blockbuster S3 and the iPhone 5's main rival, was widely regarded
as a pretty minor upgrade -- a good product, but not a real
groundbreaker, and with some so-so software.
posted a good round-up of the reviews
The next clue will come in the form of the next iPhone. If it's not
an obvious home run, this new confidence may disappear rather
However, if (and this is a big if) the iPhone 5s or 6, or whatever
it's called, is a stunner on the level of 2010's iPhone 4, I
suspect the world will get lovey-dovey with Apple once again in a
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Disclosure: Minyanville Studios, a division of Minyanville
Media, has a business relationship with BlackBerry.